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Fed’s Rosengren Says Inaction Risked ‘Worsening Pain’

Federal Reserve Bank of Boston President Eric Rosengren said that the central bank risked a worsening outlook for inflation and jobs if it hadn’t embarked this month on a second round of unconventional monetary stimulus.

“Not changing policy risked further disinflation, a rise in the real cost of funds tantamount to monetary tightening, and risks of continued and possibly worsening pain in labor markets,” Rosengren said today in a speech in Providence, Rhode Island. “There are real and significant long-term costs to individuals and the economy when the unemployment rate remains stubbornly high.”