Burlington, VT, United States (4E) – Eric Rosengren, the President of the Federal Reserve Bank of Boston who has consistently supported monetary stimulus, said that the Federal Reserve should be ready to provide further support to growth if the U.S. economy falls short of forecast.
Mr. Rosengren, who has voted on policy this year, said that he “strongly and unequivocally” backed last month’s decision of the Fed to retain the current pace of its monthly bond-buying stimulus program, due to a series of disappointing economic indicators released recently.
The policymaker’s comments came in a speech he gave before the Lake Champlain Regional Chamber of Commerce in Burlington, Vt.
In a surprising move, the Federal Open Market Committee maintained its $85bn a month bond purchases. The Fed kept its stimulus as lawmakers continue to debate how to resolve the government’s first-ever shutdown in 17 years and whether to raise the U.S. debt limit.
Mr. Rosengren said that most of the risks to the economy’s outlook remain on the downside. If the economy grows as anticipated, the next few years should only see a very slow removal of accommodation, he added. However, the official warned that if the economy slows down unexpectedly, the Fed needs to provide more accommodation than expected.