The Federal Reserve Bank’s Federal Open Market Committee (FOMC) unanimously reaffirmed it would not raise lending rates until the jobs recovery is complete, according to minutes just released of their March 16- 17 meeting. The jobs recovery is not expected to occur for 15 months. Meanwhile, the service and manufacturing sectors both soared and broke records last month, according to yesterday’s data release from the Institute of Supply Management.
Manufacturing activity, according to the monthly survey of purchasing managers conducted in March by the Institute of Supply Management, soared to a record high. This survey has been conducted for decades by ISM, a membership and accreditation body of supply management professionals at the nation’s largest corporations.
Likewise, the index of business at service companies in March also soared, rocketing from 55.3 to 63.7.
While manufacturing accounts for 11% of total U.S. economic activity, this index of activity in the service sector of the economy accounts for 89% of U.S. gross domestic product.
Amid new signs almost every week and repeated record-breaking high prices in the stock market, the FOMC minutes for its March 16-17, 2021 meeting, were particularly important.
The FOMC unanimously reaffirmed it would not raise lending rates until a full recovery in the job market. The jobs situation, according to consensus forecasts of leading economists, is not expected to recover fully until June 2022.
Despite evidence a boom is under way, the Fed is not even close to taking action to slow the economy.
The Standard & Poor’s 500 stock index closed Friday at an all time high of 4,128.80. The index gained +0.77% from Thursday and +2.67% from last week. The index is up +59.42% from the March 23rd bear market low.
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