Boston Fed's Rosengren Says He Has 'Open Mind' on Rates

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10/04/2019 | 06:44 pm

By Michael S. Derby

A veteran Federal Reserve official who opposed both of the central bank's rate cuts this year isn't ruling out his support for lowering rates at the end of the month.

"I still have an open mind. We still have more data between now and when the meeting actually occurs," Boston Fed President Eric Rosengren said on CNBC Friday.

Mr. Rosengren was interviewed after the release Friday of data that showed ongoing job gains and moderating income gains. "We're getting to the point where we're getting the kind of employment growth I would expect in kind of a stable economy," Mr. Rosengren said. "I think the bigger question whether it ends up being weaker from here and that depends, importantly, on what happens on the consumer side of the economy."

Mr. Rosengren dissented from the Fed's July and September rate cuts, and has made the case that even though risks to the outlook have grown, the economy remains healthy and doesn't need lower short-term borrowing costs. Mr. Rosengren is also worried that cheaper borrowing costs could cause financial-stability issues.

In his interview, Mr. Rosengren said what happens with consumers and inflation data will be important for his monetary-policy outlook. The Fed next meets on Oct. 29-30, and he said there is still time to make a decision. Markets expect another quarter-percentage-point rate cut at the gathering.

"There is still a little bit more data before the meeting. I don't think I should prejudge it at this point," Mr. Rosengren said. He added that it is important to see what effect the past two rate cuts have had.

In remarks in New York Thursday evening, Fed Vice Chairman Richard Clarida offered few clues about what lies next for monetary policy. "We take each meeting, we have eight meetings a year, we take them one at a time," he said, adding "we're not on a preset course. But we will act as appropriate to sustain low unemployment rate and solid growth and stable inflation."

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