Fed's Eric Rosengren Signals His Opposition to an Interest-Rate Cut
“The economy’s doing actually quite well,” Rosengren said.
(Bloomberg) -- Federal Reserve Bank of Boston President Eric Rosengren said he doesn’t believe the U.S. economy needs an interest-rate cut, given the positive data that’s rolled in since mid-June.
“The economy’s doing actually quite well,” Rosengren said in an interview Friday with CNBC. “We’re not really having an economic slowdown.”
Rosengren, who votes this year on the policy-making Federal Open Market Committee, cited a positive outcome from the G-20 summit in late June as well as strong data on employment, inflation and consumption.
“As long as the economy’s doing well, if that continues we don’t need accommodation,” he said.
Fed policy makers are widely expected to cut rates by a quarter point when they gather July 30-31 in Washington. Chairman Jerome Powell and others have signaled a cut with comments about risks to the global economy posed by ongoing trade disputes and about inflation continuing to run below the Fed’s 2% target.
Rosengren acknowledged that growth had slowed since last year and that global risks had increased, but said he still expects the U.S. economy to expand by about 2% this year.
“If we are going into what is clearly a downturn, you want to act aggressively,” because of the proximity of rates to zero, he said. “I’m not convinced the data we have right now shows that.”
He also warned that cutting rates as “insurance” against a possible downturn could itself pose risks by raising asset prices and adding to worries over financial stability.
To contact the reporter on this story: Christopher Condon in Washington at ccondon4@bloomberg.net
To contact the editors responsible for this story: Alister Bull at abull7@bloomberg.net, Margaret Collins
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