President and Chief Executive Officer of Boston Federal Reserve Bank Eric S. Rosengrin
Keith Bedford | Reuters
Boston Federal Reserve Chairman Eric Rosengrun faces a clear push to cut interest rates by telling CNBC in an interview Friday that the central bank can afford to be patient while the economy is holding back. 12 days before the Fed is expected to ease monetary policy, Rosengrn said he was aware of uncertainty and risks but did not think they were strong enough to guarantee the first cut in the interest rate since the end of 2008 during the financial crisis. "So, given that the economy is quite strong, given that I think inflation will be very close to 2%, and given that growth in the economy is satisfactory, I think this is an environment in which you will not take much action, "he told CNBC Sarah Eyson during the Bell Closing Interview
" Now if the economy changes if the trading situation changes dramatically, if we start surprise how slow China or Europe is, it is something we must definitely react to. merged, we should wait until actually seeing evidence that this is happening, "said Rosengren.
This position seems to put it on the opposite side of Fed Chairman Jerome Powell as well as many other politicians who seem to be willing to approve the least quarter-quarter reduction in the Federal Open 30-31
Rosengren joins Kansas City President Esther George as the only two voters who have publicly said they do not see the need to cut, at least not yet.
Those who prefer a reduction point to global weakness, the impact of tariffs, talks with meaningless debt, and weak inflation among their concerns. But Rosengrn said he was looking for concrete evidence of a delay, "and I do not see that until now."
"And do not worry just about how current data is coming in. But how would I say most of the news we received, at least last month, is pretty good," he added
Market participants and some representatives of The Federal Reserve, especially St. Louis, President James Bullard, pointed out the need for "insurance" to serve as a buffer against potential weakness, a move that would also offset the rise in rates in December, which was criticized by President Donald Trump do some more olly shots against the Fed in a series of tweets on Friday, and may be particularly risky considering how high stock market leaps and rising levels of corporate debt are
"it is not meaningless to take out insurance," said he. "You pay a premium for the insurance. And one of the ways you think about this price is what you do for financial stability. "
Approval of insurance will come at a time when the unemployment rate is close to the 50-year low, the economy grew by 3, 1% in the first quarter, and is expected to see a 2% growth in the second quarter, and recent retail and production data, at least in the Philadelphia and New York federal districts, were significantly better than expected
to be unpleasant and has a concern for a corporate Also, the New York Recession Probability Indicator, which uses the difference between government bond yield as a benchmark, shows a 33% chance in the next 12 months, the highest of the financial crisis
However, Rosengren, that the only recent time that the Fed has approved a reduction in insurance has come to combat unusual events – the terrorist attacks of September 11, 2001, the collapse of Long Term Capital Management's hedge funds in 1998, and the collapse of the Black Monday 1987
He admitted that and the consommation has slowed its pace from 2.9% in 2018 but said it was not at a time when the Fed was needed.
"The economy is actually pretty – quite reasonable at this stage," he said. "So if that changed, I would be happy to relax at this point, but I do not want to calm down if the economy does well without that relief."