Reuters logo
Fed's Rosengren says sees 3 further rate hikes this year
March 29, 2017 / 3:30 PM / 8 months ago

Fed's Rosengren says sees 3 further rate hikes this year

WASHINGTON, March 29 (Reuters) - Boston Federal Reserve President Eric Rosengren said on Wednesday that he thinks the U.S. central bank should raise interest rates three more times this year due to the strength of the economy.

“The base case (for 2017) would be four tightenings, reflecting the strength of the economy that I believe justifies more regular normalization of interest rates,” Rosengren said in prepared remarks to the Boston Economic Club.

At the March meeting, the Fed lifted the benchmark interest rate by 25 basis points to a target range of between 0.75 and 1 percent. The median forecast of the Fed’s 17 policymakers then was for two further rate increases this year.

With the unemployment rate at 4.7 percent and inflation rising toward the Fed’s 2 percent target rate, Rosengren noted that the risks are rising if the Fed waits too long to embark on a more regular pace barring a deterioration in economic indicators.

“If the economy runs too hot, it could ultimately require a less gradual monetary policy adjustment – which could potentially place at risk the significant progress the economy and labor market have made since the Great Recession,” he said.

The Boston Fed chief added that it seems likely the Fed will reach its goals on full employment and inflation by the end of 2017.

Rosengren had previously said in mid-February that he saw “at least” three rate hikes as being needed this year to keep the economy on an even keel. (Reporting by Lindsay Dunsmuir; Editing by Chizu Nomiyama)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below