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In his prepared remarks for delivery to the Economic Club of New York,  Boston Fed President Eric Rosengren reiterated that the current monetary policy was accommodative and consistent with inflation returning to the Fed’s 2% target.

Key quotes (via Reuters)

  • No clarion call to alter current policy in the near term.
  • Low unemployment suggests policy might be a bit tighter, low inflation sends the opposite signal.
  • Most forecasts see economy growing above its potential and also regard low inflation readings as temporary.
  • Fed can afford to wait and see if economic forecasts materialize.
  • Potential for more disruptive trade negotiations is an “Important reason for policymaker patience”.
  • If tariffs are widespread and prolonged, effect on markets and growth would be larger.
  • Unhelpful trade uncertainty will be transitory, have a modest effect on U.S. economy.
  • Tariffs tend to raise prices on imported U.S. goods, but some price hikes can be mitigated.
  • Decline in apparel and investment services may not reflect underlying price trends.
  • Broader U.S. economy is on sounder footing than at the beginning of the year.
  • Current policy is slightly accommodative, consistent with inflation returning to 2% target.
  • Tight labour markets are one reason to expect inflation to rise to Fed’s target.
  • Tariffs on most goods from China would be ‘much more apparent’ to U.S. consumers.
  • Changing policy to welcome above-target inflation during recoveries would reinforce policymakers 2% inflation aim.