Fed's Rosengren Says `Regular and Gradual' Tightening Warranted
- Inflation shortfall is temporary, but unemployment trend isn’t
- Says undershooting on jobless rate risks asset-price inflation
Yellen Says Fed Rate Hike Path Not Set in Stone
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Federal Reserve Bank of Boston President Eric Rosengren said the central bank should raise rates in a “regular and gradual” way despite low inflation, because weak price pressures appear temporary and a tight labor market risks overheating the economy.
“Appropriate risk mitigation would argue for continued gradual removal of monetary accommodation, even though we are currently below the inflation target,” Rosengren said in prepared remarks for a speech Wednesday in New York. “I believe policy makers should not overreact to low current inflation readings that are widely expected to be temporary.”