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Fed’s policymakers began to reflect on the unexpectedly robust jobs report for January, a few hours before Chair Jerome Powell faces questions later on Tuesday on whether the NFP data has shaken his confidence that high inflation will come down without hawkish moves by the central bank to slow the economy. Powell is due to speak at 1240 EST (1740 GMT).
“I think it surprised all of us,” Minneapolis Fed President Neel Kashkari said in an interview on CNBC TV on Tuesday, referring to the blowout jobs report last Friday in which more than half a million employment gains were reported for January by the US government.
The US dollar holds resilient against its major rivals after these comments with the US Dollar Index clinging to modest daily gains at 103.888 at the time of writing.
The jobs figure was far out of line with the looser labour market the Fed has expected and Kashlari feels additional moves will be required to ensure that wage growth also slows and inflation continues to ease.
Kashkari, who has been more aggressive than almost all other policymakers, pointed out one month ago that he forecast the policy rate should rise to 5.4%. The jobs report eventually consolidated that view.
