Friday, October 2, 2009

Eric Rosengren discusses U.S. economy, role of Federal Reserve at Chamber breakfast

At this morning's Greater Boston Chamber Financial Services Forum, Eric Rosengren, president & CEO of the Federal Reserve Bank of Boston, discussed inflation and monetary policy for these extraordinary times.

Rosengren, an economist who has studied Japan's economy and their financial crisis in the 1990's, spoke of lessons that the United States could take from Japan. Based on his experience with inflation in both the U.S. and Japan, Rosengren reflected: "I personally expect our primary short run concern to be disinflation rather than inflation."

In his concluding remarks, Rosengren summed up his feelings on the economic recovery:
"While I expect that we will see positive growth in the third and fourth quarter of this year, it will not be sufficient to make significant headway in improving labor-market conditions right away...Despite the many positive signs we are seeing in the economy, the financial markets and the real economy need more time to heal...The extraordinary economic times we have been experiencing give us all pause, and leave many observers with concern about policy actions and their possible outcomes. I believe, however, that...the lessons from Japan's experience are illuminating and should bring comfort that current U.S. policy is on the right path - with benificial implications for the trajectories of both inflation and economic growth."
During the Q&A with Chamber members, Rosengren touched on a variety of issues, including resolution authority and the role of the Federal Reserve. Check out the video below for his answer:

The Boston Globe's Rob Gavin has more on Rosengren's remarks.

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