As U.S. Prospects Brighten, Fed’s Powell Sees Risk in Global Vaccination Pace

Jerome H. Powell, the Federal Reserve chair, stressed on Thursday that even as economic prospects look brighter in the United States, getting the world vaccinated and controlling the coronavirus pandemic remain critical to the global outlook.

“Viruses are no respecters of borders,” Mr. Powell said while speaking on an International Monetary Fund panel. “Until the world, really, is vaccinated, we’re all going to be at risk of new mutations and we won’t be able to really resume activity with confidence all around the world.”

While some advanced economies, including the United States, are moving quickly toward widespread vaccination, many emerging market countries lag far behind: Some have administered as little as one dose per 1,000 residents.

Mr. Powell joined a chorus of global policy officials in emphasizing how important it is that all nations — not just the richest ones — are able to widely protect against the coronavirus. Kristalina Georgieva, the managing director of the International Monetary Fund, said policymakers needed to remain focused on public health as the key policy priority.

fresh data showed that state jobless claims climbed last week. Mr. Powell pointed out that the burden is falling heavily on those least able to bear it: Lower-income service workers, who are heavily minorities and women, have been hit hard by the job losses.

raising corporate taxes.

“For quite some time, we have been in favor of more investment in infrastructure. It helps to boost productivity here in the United States,” Ms. Georgieva said, calling climate-focused and “social infrastructure” provisions positive. She said they had not had a chance to fully assess the plan, but “broadly speaking, yes, we do support it.”

But the White House’s plan has already run into resistance from Republicans and some moderate Democrats, who are wary of raising taxes or engaging in another big spending package after several large stimulus bills.

Some commentators have warned that besides expanding the nation’s debt load, the government’s virus spending — particularly the recent $1.9 trillion stimulus package — could cause the economy to overheat. Fed officials have been less worried.

“There’s a difference between essentially a one-time increase in prices and persistent inflation,” Mr. Powell said on Thursday. “The nature of a bottleneck is that it will be resolved.”

If price gains and inflation expectations moved up “materially,” he said, the Fed would react.

“We don’t think that’s the most likely outcome,” he said.

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Powell and Yellen Tell Senators Economic Support Is Still Needed

America’s top two economic officials told senators on Wednesday that the economy is healing but still in a deep hole and that continued government support is providing a critical lifeline to families and businesses.

The remarks by Jerome H. Powell, the Federal Reserve chair, and Janet L. Yellen, the Treasury Secretary and Mr. Powell’s immediate predecessor at the Fed, before the Senate Banking Committee echoed their testimony before House lawmakers on Tuesday.

Mr. Powell said in his remarks that the government averted the worst possible outcomes in the pandemic economic recession with its aggressive spending response and super-low Fed interest rates.

“But the recovery is far from complete. So at the Fed, we will continue to provide the economy the support that it needs for as long as it takes,” he said.

the recently passed $1.9 trillion relief package, said responding to a crisis with a needed surge of temporary spending without paying for it was “appropriate.”

“Longer-run, we do have to raise revenue to support permanent spending that we want to do,” she said.

She said expanded unemployment insurance, part of the recent relief package, does not seem to be discouraging work and is needed at a time when the labor market is not at full strength.

“While unemployment remains high, it’s important to provide the supplementary relief,” Ms. Yellen said, noting that the aid lasts until the fall. She said the aid should be phased out as the economy recovers.

The Biden administration is also making plans for a $3 trillion infrastructure package, and Republicans on the committee expressed concern about the mounting deficits facing United States.

 stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more.

Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read more

This credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.

There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.

The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.

“I do worry that the Fed may be behind the curve when inflation inevitably picks up,” Senator Patrick J. Toomey, Republican of Pennsylvania, said during his opening remarks.

But Mr. Powell has consistently pushed back on warnings about runaway inflation and did so again on Wednesday.

stuck in the Suez Canal, but also in general as the economy reopens — he struck a similarly unconcerned tone.

“A bottleneck, by definition, is temporary,” he said.

He also batted back concerns about a recent increase in market-based interest rates. The yield on 10-year Treasury notes, a closely watched government bond, has moved up since the start of the year.

“Rates have responded to news about vaccination, and ultimately, about growth,” Mr. Powell said. “That has been an orderly process. I would be concerned if it were not an orderly process, or if conditions were to tighten to a point where they might threaten our recovery.”

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Fed’s Powell to tell lawmakers ‘the worst was avoided’ in pandemic economic fallout.

Jerome H. Powell, the head of the Federal Reserve, will tell lawmakers on Tuesday that the economy is healing, saying that while many workers and businesses continue to suffer, the aggressive response from the central bank, Congress and the White House helped to avoid the most devastating economic scenarios.

“While the economic fallout has been real and widespread, the worst was avoided by swift and vigorous action,” Mr. Powell will tell the House Financial Services committee, according to prepared remarks.

He will point out that the economy has recently improved, including the labor market, which has begun adding back jobs after a winter lull.

“However, the sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak, and the unemployment rate — still elevated at 6.2 percent — underestimates the shortfall,” Mr. Powell is set to say.

market-facing programs in 2020, which supported credit to corporations, midsize businesses and municipalities, helped to “keep organizations from shuttering and put employers in both a better position to keep workers on and to hire them back as the recovery continues.”

And he will underline that the programs, in most cases, have either shut down or will soon end. Mr. Powell consistently has said that the lending efforts, supported by the Treasury, were emergency tools that the Fed would stop using once conditions were stable.

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The Week in Business: Go Ahead, Put Off Your Taxes

Good morning and happy spring. Here’s hoping you can enjoy another Sunday spent ignoring your tax returns (or, if you’ve already done them, feeling smug about it). But first, here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles

Credit…Giacomo Bagnara

Good news for procrastinators like me, or anyone whose taxes were complicated by the pandemic: The Internal Revenue Service has extended the deadline to file taxes by one month, to May 17. The extra time will help people navigate new tax rules that took effect with the passage of the American Rescue Plan. The law made the first $10,200 of unemployment benefits tax-free for people who earned less than $150,000 last year, a significant benefit for many people whose jobs were disrupted. But if you’ve already filed, don’t worry — the I.R.S. said it would automatically send those refunds to people who qualify.

Relations between China and the Biden administration got off to a rocky start last week at the first face-to-face meeting between diplomats. The United States set a confrontational tone on the eve of the talks by imposing sanctions on 24 Chinese officials for undermining democracy in Hong Kong. In turn, China’s top diplomat accused his American counterparts of being “condescending,” among other claims. The purpose of the three-day meeting, according to President Biden’s team, was to find common ground on climate change and on controlling the pandemic, and to address U.S. concerns about Chinese trade and military encroachments. The tension does not bode well for making headway in future negotiations.

suing the Walt Disney Company for what they call “rampant gender pay discrimination” have added another accusation to their list: that Disney “maintains a strict policy of pay secrecy.” A new section of the lawsuit refers to an episode in which one female Disney employee was “disciplined for disclosing her pay to co-workers.” Pay transparency is considered an important part of closing racial and gender wage gaps, and retaliation for discussing your own salary violates California law as well as the National Labor Relations Act. Disney has denied the claims and vowed to defend itself.

Credit…Giacomo Bagnara

Walmart is jumping on the vaccine passport bandwagon, saying it will provide standardized digital vaccination credentials to anyone who gets vaccinated at one of its stores or at Sam’s Club. The retailer will develop a health passport app that people can use to verify their status at airports, schools, sports arenas and other potentially crowded places. Walmart joins an existing push by major health centers and tech companies, including Microsoft, Oracle, Salesforce and the Mayo Clinic, as well as a proposal from the European Union, which would require vaccine verification for travel in certain areas.

How Has the Pandemic Changed Your Taxes?

Nope. The so-called economic impact payments are not treated as income. In fact, they’re technically an advance on a tax credit, known as the Recovery Rebate Credit. The payments could indirectly affect what you pay in state income taxes in a handful of states, where federal tax is deductible against state taxable income, as our colleague Ann Carrns wrote. Read more.

Mostly.  Unemployment insurance is generally subject to federal as well as state income tax, though there are exceptions (Nine states don’t impose their own income taxes, and another six exempt unemployment payments from taxation, according to the Tax Foundation). But you won’t owe so-called payroll taxes, which pay for Social Security and Medicare. The new relief bill will make the first $10,200 of benefits tax-free if your income is less than $150,000. This applies to 2020 only. (If you’ve already filed your taxes, watch for I.R.S. guidance.) Unlike paychecks from an employer, taxes for unemployment aren’t automatically withheld. Recipients must opt in — and even when they do, federal taxes are withheld only at a flat rate of 10 percent of benefits. While the new tax break will provide a cushion, some people could still owe the I.R.S. or certain states money. Read more.

Probably not, unless you’re self-employed, an independent contractor or a gig worker. The tax law overhaul of late 2019 eliminated the home office deduction for employees from 2018 through 2025. “Employees who receive a paycheck or a W-2 exclusively from an employer are not eligible for the deduction, even if they are currently working from home,” the I.R.S. said. Read more.

Self-employed people can take paid caregiving leave if their child’s school is closed or their usual child care provider is unavailable because of the outbreak. This works similarly to the smaller sick leave credit — 67 percent of average daily earnings (for either 2020 or 2019), up to $200 a day. But the caregiving leave can be taken for 50 days. Read more.

Yes. This year, you can deduct up to $300 for charitable contributions, even if you use the standard deduction. Previously, only people who itemized could claim these deductions. Donations must be made in cash (for these purposes, this includes check, credit card or debit card), and can’t include securities, household items or other property. For 2021, the deduction limit will double to $600 for joint filers. Rules for itemizers became more generous as well. The limit on charitable donations has been suspended, so individuals can contribute up to 100 percent of their adjusted gross income, up from 60 percent. But these donations must be made to public charities in cash; the old rules apply to contributions made to donor-advised funds, for example. Both provisions are available through 2021. Read more.

Chief executives from Facebook, Google and Twitter will be grilled in Congress this Thursday, this time over their failure to crack down on the spread of misinformation. Tech executives were last summoned by lawmakers in November 2020, when Mark Zuckerberg of Facebook and Jack Dorsey of Twitter faced a firestorm of questioning about content moderation, mostly regarding their attempts to prevent a wave of falsehoods about the presidential election. This time, they will be asked about coronavirus vaccine misinformation and about the election fraud conspiracy theories that continue to spread on their platforms.

The two biggest names in economic policy — the Federal Reserve chair, Jerome Powell, and Treasury Secretary Janet Yellen — will make their first joint appearance this week when they testify before the House Financial Services Committee on the progress of pandemic relief efforts. The hearing comes one week after the Fed revised its economic outlook to project stronger growth and offered more reassurances that it would keep interest rates near zero for the coming years.

jettisoned a Trump-era policy that limited debt relief for students who were defrauded by for-profit educational institutions. The newly hired Teen Vogue editor, Alexi McCammond, resigned over racist and homophobic tweets that she posted a decade ago. And retail sales dropped 3 percent in February as consumers grappled with declining stimulus effects and devastating winter storms.

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Jerome Powell Promises Not to Take Away the Punch Bowl

It was once said that the governor of the Bank of England had the power to guide the behavior of Britain’s banks with the mere raise of an eyebrow. For the Federal Reserve in 2021, the equivalent may be Jerome Powell’s chuckle.

Mr. Powell, the Fed chair, was asked at a news conference Wednesday whether — in light of its forecast that the economy would recovery quickly in the months ahead — it was time to “start talking about talking about” slowing the central bank’s buying of $80 billion in bonds each month.

He let out a half-laugh before answering, “Not yet.”

His dismissiveness at the idea that the Fed would even consider slowing its efforts to strengthen the economy was one of many chances he took in Wednesday’s session to convey one simple message: The central bank will not waver in its aggressive efforts to encourage growth until the economy is truly and unquestionably back to health.

It almost surely won’t be the last time he faces questions that second-guess that resolve.

If the economy evolves as Mr. Powell and most private forecasters think it will, a veritable boom will be underway later this year. As a result, he and his colleagues at the Fed would face a continuing test of their willingness to follow through on the approach they unanimously agreed to last summer. That new policy framework ended an era in which the Fed pre-emptively raised interest rates because falling unemployment risked future inflation.

Mr. Powell’s job on Wednesday was to persuade financial markets and everyone who makes economic decisions that the Fed was serious about this plan. That it won’t be swayed by all the things that, based on its history, might cause an increase in interest rates and choke off the expansion prematurely.

If prices for certain goods and services were to surge as the economy came back, it would, in this view, be a one-time bulge rather than a continuing rise in inflation to which the Fed might need to respond. The central bank’s officials now project 2.4 percent inflation this year, overshooting their 2 percent target, with a projected return to the target in 2022.

An old metaphor holds that the Fed’s job is to take away the punch bowl just as the party gets going. The official view of the central bank’s leaders now is that it has been an overly stingy host, taking away the punch bowl so quickly that parties were dreary, disappointing affairs.

The job now is to persuade the world that it really will leave the punch bowl out long enough, and spiked adequately — that it will be a party worth attending. They insist punch bowl removal will be based on actual realized inebriation of the guests, not on forecasts of potential future problematic levels of drunkenness.

Mr. Powell’s dismissive chuckle was just one piece of the messaging. It was the prevailing idea that he returned to in multiple ways (emphasis added in these quotations):

“We will continue to provide the economy the support that it needs for as long as it takes.”

“We’re not going to act pre-emptively based on forecasts for the most part, and we’re going to wait to see actual data. And I think it will take people time to adjust to that, and the only way we can really build the credibility of that is by doing it.”

“People start businesses, they reopen restaurants, the airlines will be flying again — all of those things will happen, and it will turn out to be a one-time bulge in prices, but it won’t change inflation going forward.”

He also played down the release of the Fed’s “dot-plot” of when to expect it to be time to raise rates. Four of 18 Fed officials thought that rate increases would be warranted by the end of 2022, and seven by the end of 2023. Mr. Powell emphasized that a comfortable majority envisioned no rate increases in the next three years.

The questions he faced from the press Wednesday were just the beginning of what figures to be a perennial topic whenever he or other leaders of the central bank face lawmakers, business leaders or the news media. The tone and details may vary, but will all mean: “Are you sure you’re not going to start tightening the money supply?”

The questions might tie into inflationary pressures. For example, many conservatives have started to complain about rising gasoline prices. Based on the experience of past Fed leaders, Mr. Powell can expect plenty of questions about that in his next visit to Capitol Hill.

Or the questions could focus more on booming financial markets and whether the Fed needs to raise rates to rein in speculation.

Moreover, even if Mr. Powell sticks to the plan, the diffuse nature of power within the Federal Reserve system will make it easy for mixed messages to emerge. There are 12 presidents of regional Fed banks and seven governors in Washington (with one slot vacant). This means only a handful need to develop cold feet about the strategy — and start talking about it publicly — to cause markets and businesses to doubt the Fed’s commitment.

In many ways, it is the inverse of the situation that Paul Volcker faced as Fed leader in the early 1980s, as he engineered aggressive rate increases to curtail the high inflation of that era. To prevail, he had to resist pressure from fellow Fed appointees who had not fully bought into the strategy, even threatening to resign rather than lose a close vote.

The situation is certainly not that dramatic — yet — in 2021, given the unanimous vote on the new policy framework and the apparent strong majority on the committee who believe rates need to stay low.

But if history is a guide, and inflation trends and financial markets are as unpredictable in the months ahead as they have been in the recent past, it may take more than a laugh for Mr. Powell to dismiss questions from the tight-money crowd.

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The Financial Crisis the World Forgot

By the middle of March 2020 a sense of anxiety pervaded the Federal Reserve. The fast-unfolding coronavirus pandemic was rippling through global markets in dangerous ways.

Trading in Treasurys — the government securities that are considered among the safest assets in the world, and the bedrock of the entire bond market — had become disjointed as panicked investors tried to sell everything they owned to raise cash. Buyers were scarce. The Treasury market had never broken down so badly, even in the depths of the 2008 financial crisis.

The Fed called an emergency meeting on March 15, a Sunday. Lorie Logan, who oversees the Federal Reserve Bank of New York’s asset portfolio, summarized the brewing crisis. She and her colleagues dialed into a conference from the fortresslike New York Fed headquarters, unable to travel to Washington given the meeting’s impromptu nature and the spreading virus. Regional bank presidents assembled across America stared back from the monitor. Washington-based governors were arrayed in a socially distanced ring around the Fed Board’s mahogany table.

Ms. Logan delivered a blunt assessment: While the Fed had been buying government-backed bonds the week before to soothe the volatile Treasury market, market contacts said it hadn’t been enough. To fix things, the Fed might need to buy much more. And fast.

announced an enormous purchase program, promising to make $500 billion in government bond purchases and to buy $200 billion in mortgage-backed debt.

It wasn’t the central bank’s first effort to stop the unfolding disaster, nor would it be the last. But it was a clear signal that the 2020 meltdown echoed the 2008 crisis in seriousness and complexity. Where the housing crisis and ensuing crash took years to unfold, the coronavirus panic had struck in weeks.

As March wore on, each hour incubating a new calamity, policymakers were forced to cross boundaries, break precedents and make new uses of the U.S. government’s vast powers to save domestic markets, keep cash flowing abroad and prevent a full-blown financial crisis from compounding a public health tragedy.

The rescue worked, so it is easy to forget the peril America’s investors and businesses faced a year ago. But the systemwide weaknesses that were exposed last March remain, and are now under the microscope of Washington policymakers.

cut interest rates to about 1 percent — its first emergency move since the 2008 financial crisis. Some analysts chided the Fed for overreacting, and others asked an obvious question: What could the Fed realistically do in the face of a public health threat?

“We do recognize that a rate cut will not reduce the rate of infection, it won’t fix a broken supply chain,” Chair Jerome H. Powell said at a news conference, explaining that the Fed was doing what it could to keep credit cheap and available.

But the health disaster was quickly metastasizing into a market crisis.

Lockdowns in Italy deepened during the second week of March, and oil prices plummeted as a price war raged, sending tremors across stock, currency and commodity markets. Then, something weird started to happen: Instead of snapping up Treasury bonds, arguably the world’s safest investment, investors began trying to sell them.

The yield on 10-year Treasury debt — which usually drops when investors seek safe harbor — started to rise on March 10, suggesting investors didn’t want safe assets. They wanted cold, hard cash, and they were trying to sell anything and everything to get it.

officially declared the virus outbreak a pandemic, and the morning on which it was becoming clear that a sell-off had spiraled into a panic.

The Fed began to roll out measure after measure in a bid to soothe conditions, first offering huge temporary infusions of cash to banks, then accelerating plans to buy Treasury bonds as that market swung out of whack.

But by Friday, March 13, government bond markets were just one of many problems.

Investors had been pulling their cash from prime money market mutual funds, where they park it to earn a slightly higher return, for days. But those outflows began to accelerate, prompting the funds themselves to pull back sharply from short-term corporate debt markets as they raced to return money to investors. Banks that serve as market conduits were less willing than usual to buy and hold new securities, even just temporarily. That made it harder to sell everything, be it a company bond or Treasury debt.

The Fed’s announcement after its March 15 emergency meeting — that it would slash rates and buy bonds in the most critical markets — was an attempt to get things under control.

But Mr. Powell worried that the fix would fall short as short- and long-term debt of all kinds became hard to sell. He approached Andreas Lehnert, director of the Fed’s financial stability division, in the Washington boardroom after the meeting and asked him to prepare emergency lending programs, which the central bank had used in 2008 to serve as a support system to unraveling markets.

short-term corporate debt and another to keep funding flowing to key banks. Shortly before midnight on Wednesday, March 18, the Fed announced a program to rescue embattled money market funds by offering to effectively take hard-to-sell securities off their hands.

But by the end of that week, everything was a mess. Foreign central banks and corporations were offloading U.S. debt, partly to raise dollars companies needed to pay interest and other bills; hedge funds were nixing a highly leveraged trade that had broken down as the market went haywire, dumping Treasurys into the choked market. Corporate bond and commercial real estate debt markets looked dicey as companies faced credit rating downgrades and as hotels and malls saw business prospects tank.

The world’s most powerful central bank was throwing solutions at the markets as rapidly as it could, and it wasn’t enough.

hit newswires at 8 a.m., well before American markets opened. The Fed promised to buy an unlimited amount of Treasury debt and to purchase commercial mortgage-backed securities — efforts to save the most central markets.

serve as a lender of last resort to troubled banks. On March 23, it pledged to funnel help far beyond that financial core. The Fed said it would buy corporate debt and help to get loans to midsize businesses for the first time ever.

It finally worked. The dash for cash turned around starting that day.

The March 23 efforts took an approach that Mr. Lehnert referred to internally as “covering the waterfront.” Fed economists had discerned which capital markets were tied to huge numbers of jobs and made sure that every one of them had a Fed support program.

On April 9, officials put final pieces of the strategy into play. Backed by a huge pot of insurance money from a rescue package just passed by Congress — lawmakers had handed the Treasury up to $454 billion — they announced that they would expand already-announced efforts and set up another to help funnel credit to states and big cities.

The Fed’s 2008 rescue effort had been widely criticized as a bank bailout. The 2020 redux was to rescue everything.

The Fed, along with the Treasury, most likely saved the nation from a crippling financial crisis that would have made it harder for businesses to survive, rebound and rehire, intensifying the economic damage the coronavirus went on to inflict. Many of the programs have since ended or are scheduled to do so, and markets are functioning fine.

But there’s no guarantee that the calm will prove permanent.

“The financial system remains vulnerable” to a repeat of last March’s sweeping disaster as “the underlying structures and mechanisms that gave rise to the turmoil are still in place,” the Financial Stability Board, a global oversight body, wrote in a meltdown post-mortem.

Industry players are already mobilizing a lobbying effort, and they may find allies in resisting regulation, including among lawmakers.

“I would point out that money market funds have been remarkably stable and successful,” Senator Patrick J. Toomey, Republican of Pennsylvania, said during a Jan. 19 hearing.

Matt Phillips contributed reporting.

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Biden Presses Economic Aid Plan, Rejecting Inflation Fears

As investors look for a pickup in growth and slightly faster price increases, watchers of the Federal Reserve have begun to expect that it might begin to slow its big bond purchases, which it has been using to bolster growth, and raise interest rates sooner than had been anticipated.

The central bank has promised to leave interest rates near zero until the economy has achieved full employment and inflation is above 2 percent and expected to stay there for some time. If markets expect the economy to reach those goals sooner rather than later, that could be seen as an expression of optimism.

“If you look at why they’re moving up, it’s to do with expectations of a return to more normal levels, more mandate-consistent levels of inflation, higher growth, an opening economy,” Jerome H. Powell, the Fed chair, said of rates during a recent congressional testimony.

But markets are forward-looking: The economy has a long way to go before it will be back to full strength. Administration officials have vowed not to be distracted by improvements in high-profile numbers, like overall job growth, and instead keep pouring fuel on the recovery until historically disadvantaged groups have regained jobs, income and the benefits of other measures of economic progress.

Job gains last month came in above economists’ forecasts, but it would take more than two years of hiring at the current level to return the labor market to its employment level in early 2020.

In addition, while all demographic groups continue to feel economic pain, the fallout has not been evenly spread. Employment for Black workers remains nearly 8 percent below its prepandemic level, while employment for white workers is down about 5 percent. Black workers tend to lose jobs heavily during recessions, then gain them back only after a long stretch of job growth.

Ms. Jones, the labor department economist, said the administration was determined to accelerate the recovery for marginalized workers, noting that Black workers, in particular, took years longer to recover from the 2008 financial crisis — a delay that left lasting scars on those households.

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