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3/29/2017, 5:54 PM (Source: TeleTrader)
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Fed's Rosengren calls for three more hikes this year

The strength of the world's biggest economy allows "more regular normalization" of monetary policy, according to Eric Rosengren, president of the Federal Reserve Bank of Boston. Speaking in Boston on Wednesday, this year's non-voting member of the Federal Open Market Committee explained the dual mandate of full employment and stable prices may be reached by the end of the year, and that the system should be shielded from overheating.

"I view four increases this year as fully consistent with comments from FOMC participants stating that the path of normalizing rates will be gradual. Clearly, such a pace would be slower than the previous tightening cycle, beginning in June of 2004, when the FOMC increased interest rates at each meeting for 17 meetings," he stressed. The official of the Federal Reserve said the unemployment rate in 28 states is already at least one percentage point lower than the 20-year average. Policymakers increased the benchmark rate of interest once this year, by a quarter of a percentage point, and their median assessment for the whole year is three equivalent hikes.

"With the nominal rate still low and inflation approaching 2%, the result is a real rate below zero. With the real effective federal funds rate still quite negative, I consider it appropriate to move the nominal rate – gradually but more regularly – so the real rate becomes less negative," Rosengren stressed.

Breaking the News / IT