(Reuters) – The U.S. economy “has been recovering at a rapid pace” from the coronavirus recession, Federal Reserve Governor Michelle Bowman said on Wednesday, but unemployment remains quite high and further monetary and targeted fiscal support likely will be needed.
“Even with this support, however, I anticipate that the path toward full recovery will be bumpy, and that our progress will likely be uneven,” Bowman said in remarks prepared for delivery by webcast to a St. Louis Fed community banking conference. “Asset prices in particular, remain vulnerable to significant price declines should the pandemic seriously worsen.”
Bowman’s remarks represented an upgrade to the outlook she delivered in August and reflect the generally stronger economic data since then, including record home prices, continued gains in the labor market and a surge in consumer confidence.
The Fed earlier this month vowed to keep interest rates near their current near-zero level until inflation reaches and is on track to moderately exceed the Fed’s 2% goal, a decision Bowman voted for but did not directly address in her remarks.
Bowman said recent “encouraging” data reflected support from fiscal stimulus.
Most of a $2.3 trillion pandemic relief package passed in March has been depleted, and after months of an impasse over further relief lawmakers this week were renewing talks on possible further support.
Bowman said the Fed is watching the commercial real estate market closely for signs of further stress.
“I also expect the pace of the recovery will continue to vary from area to area, and will be heavily influenced by not only the course of the virus, but also the public policy decisions made across all levels of government,” she said.
Reporting by Ann Saphir; Editing by Andrea Ricci