Fed's Rosengren Further Explains Disagreement With Fed's Decision Not To Raise Rates

It is of public knowledge that Federal Reserve Bank of Boston President Eric Rosengren, same as Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester, disagreed with the FOMC’s decision not to raise interest rates for the time being.

On Friday, Rosengren issued a statement explaining the reasons behind his dissent. The Fed’s unwillingness to gradually raise rates might put the United States' economic recovery at risk, he stated.

Related Link: Fed Leaves Rates Unchanged, Statement Signals December Hike

“It is important to note that even with a gradual increase in interest rates, monetary policy’s stance would be accommodative and as such would lead to further improvement of labor market conditions. This would allow policymakers to continue testing to find the level of full employment – but gently, not sharply,” Rosengren explicated.

“As a result I am arguing for modest, gradual tightening now, out of concern that not doing so today will put the recovery’s duration and sustainability at greater risk, by generating the sorts of significant imbalances that historically have led to a recession,” he added.

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