Not the right time to raise rates, says Fed's Rosengren
Boston Federal Reserve President Eric Rosengren said on Monday that the Fed is not yet in a position to start hiking interest rates.
In a speech to a business group in Hartford, Connecticut, he said that a disappointing rate of growth since last winter means the preconditions for a rate hike have not been met and expressed scepticism that weak first-quarter growth was due to temporary factors, as many Fed officials have suggested.
Rosengren said: “The data were not just weak during the worst of winter; they were also weak before the storms and have been weaker than expected ever since."
"It is too soon to know whether this is driven primarily by temporary factors like the severe winter, or is a reflection of broader changes in the economy," he added.
He said that if the economy continues to grow at the same pace witnessed on average in the current and past two quarters, he does not expected to see timely improvements in the unemployment rate and sufficient progress toward the 2% inflation target. "This, in my view, makes a compelling argument for continued patience in monetary policy," said Rosengren.
The Federal Reserve is due to meet in the middle of June to discuss monetary policy.