Rosengren Advocating Normal Level For Interest Rate

Forex News

Eric Rosengren, Boston Fed President, stated that it’s time to adjust interest rate back to “normal” level. He said that: “here is upward pressure on inflation, and given that we are already at 2 percent, labor markets are already tight … that is going to be a situation where we start persistently having inflation above what our target is.” And: “there is an argument to normalize policy and probably be mildly restrictive.”

Boston Fed President also told recent job and growth data were disturbingly “inconsistent” with the estimates of a low neutral rate. He added: “it would not surprise me at all if the committee estimates (on neutral rate) … go up over time.” And, if those estimates rise, “you would expect the path to move as well.”