Good day. The timing isn’t right for the Fed to scale back its stimulus, but doing so when the U.S. economy is meeting the central bank’s goals will help keep the recovery going, Dallas Fed President Robert Kaplan said in an interview with The Wall Street Journal. Meanwhile, central banks have been paring their U.S. dollar holdings in recent months. And the International Monetary Fund increased its forecast for global growth to 6% this year, the most since 1980. 

 Now on to today’s news and analysis.

Federal Reserve Bank of Dallas President Robert Kaplan said it isn’t time for the central bank to pull back on its support of the economy, but paring stimulus when it becomes clear the coronavirus pandemic is abating and the economy is meeting the Fed’s goals will be important to keep the recovery on track.

“When we’re in the middle of a crisis, we should be aggressively using our tools, so I agree with what we’re doing now in terms of asset purchases and stance of policy generally,” Mr. Kaplan said in an interview. But he added, “I believe that as we’re making progress toward meeting our goals, I think it would be much healthier—the economy would be much healthier if we wean off these extraordinary measures.”

• Transcript: WSJ Interview With Dallas Fed President Robert Kaplan

Time N/A: National Bank of Poland releases policy statement
8:30 a.m.: U.S. Commerce Department releases February international trade data
9 a.m: Chicago Fed’s Evans discusses the economy and monetary policy at the Prairie State College Foundation Economic Forecast Breakfast
11 a.m.: Dallas Fed’s Kaplan participates in Reinventing Bretton Woods Committee event
12 p.m.: Richmond Fed’s Barkin participates in GIC Executive Briefing, Monetary Policy Outlook event
1 p.m.: San Francisco Fed’s Daly discusses the state of the U.S. economy, climate change and economic inequality at University of Nevada, Reno event
2 p.m.: Federal Reserve releases March 16-17 meeting minutes
3 p.m.: Federal Reserve releases February U.S. consumer-credit data

Time N/A: Bank of Mexico releases March meeting minutes
7:30 a.m.: European Central Bank releases March 10-11 meeting minutes
12 p.m.: Fed’s Powell speaks at virtual International Monetary Fund debate on the global economy
2 p.m.: Minneapolis Fed’s Kashkari speaks at virtual Economic Club of New York event

Americans haven’t oversaved during the coronavirus pandemic, a new research paper from the Federal Reserve Bank of New York says. “Although large by historical standards, the savings accumulated by U.S. households during the pandemic do not appear to be ‘excessive’ when set against the extraordinary need of many American families and the unprecedented government intervention to support them,” Florin Bilbiie, Gauti Eggertsson, Giorgio Primiceri and Andrea Tambalotti write. The authors of the paper say it is possible Americans might start spending some of their $1.6 trillion in cash once the pandemic abates, but add they only expect a “limited” increase in spending out of the savings. The authors say their view on savings does not preclude a strong recovery, noting that “spending out of excess savings won’t be one of its major drivers.”

—Michael S. Derby

• The eurozone jobless rate remained unchanged in February at 8.3%, following a revised level of 8.3% in January, even as a sharp rise in new coronavirus infections and tightened government restrictions led many businesses to reduce or suspend services, the European Union’s statistics agency said Tuesday. (Dow Jones Newswires)
• The number of available jobs in the U.S. rose by 268,000 in February to end the month at 7.4 million, the Labor Department said, as openings rose in some sectors that saw strong hiring in March, including health care and social assistance, accommodation and food services, and arts, entertainment and recreation. (DJN)
• The Caixin China Services purchasing managers index climbed to 54.3 in March from February’s 10-month low of 51.5, Caixin Media Co. and research firm Markit said Tuesday, placing the private gauge of services-sector activity above the 50-mark separating expansion from contraction. (DJN)
• The People's Bank of China said the nation's foreign-exchange reserves dropped $34.96 billion to $3.170 trillion at the end of March. (DJN) 
• A gauge of consumer confidence in Mexico rose 1.6 points in March to 40.4, statistics institute Inegi reported, reaching its highest level since the start of the coronavirus pandemic. (DJN)

This newsletter is compiled by James Christie in San Francisco and Ed Ballard in London. 

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