“I have not seen enough evidence yet to convince me that 2013 is going to break out of that pattern that we’ve seen, really over the last four years,” Lockhart said. He predicts “a modest pace of growth, inflation that is pretty well contained and a very gradual reduction in unemployment.”
Evans said the economy will probably expand 2.5% or “maybe a little bit more” this year and that “2014 will be much stronger.”
Growth could “reach escape velocity by 2014 so the economy can grow without the really strong support that monetary policy is giving,” he said.
Fed officials will know more about the state of employment when the Labor Department releases its monthly report on job growth at 8:30 a.m. tomorrow in Washington. The median estimate from economists in a Bloomberg survey predicts an increase of 190,000 jobs in March. The unemployment rate is forecast to remain unchanged at 7.7%.
Policy makers said after a meeting last month that their purchases will remain divided between $40 billion a month of mortgage bonds and $45 billion a month of Treasuries. The FOMC repeated that it will hold the main interest rate near zero as long as unemployment remains above 6.5% and inflation is projected not to exceed 2.5%.
The FOMC will be in no hurry to slow its asset purchases this year with inflation below its target, St. Louis Fed President James Bullard said yesterday.
“It is full steam ahead right now,” Bullard said in a Bloomberg Radio interview. “I think that is exactly what the committee is doing.”
Fed Governor Daniel Tarullo said yesterday that while some economic data have exceeded expectations, he wants more consistent job growth before he can support curbing bond buying.
“At the very least what I’d like to see is some good healthy peaks that have job creation well above the rate of new entrants into the labor market,” followed by a “plateau that can be the basis for some more peaks later,” Tarullo told CNBC.
Lockhart, 66, was a banking executive and Georgetown University professor before he was appointed to lead the Atlanta Fed in 2007. Evans, 55, became president of the Chicago reserve bank in 2007 after serving as its director of research.