Federal Reserve Bank of Boston President Eric Rosengren said estimates for US economic growth are down, putting the trajectory expected the central bank to risk rate hikes.
While the median projection last Officials month provides a "reasonable estimate" for the likely path of the rate in 2016, this forecast faces "downside risks," Rosengren said Wednesday in the text a speech to the Chamber of commerce of Greater Boston. "I will remain very attentive to external economic conditions, any weakening of the domestic economic situation and the path of US inflation."
The Federal Open Market Committee policy voted Dec. 16 to raise the central bank benchmark interest rate by a quarter percentage point, a move supported Rosengren, based largely on progress made millions of Americans back to work after the worst recession since the great depression. the median projection of FOMC members before the meeting convened for four quarters of a point increase in 2016.
Rosengren is considered among the members of the FOMC more favorable accommodative monetary policies.
"policy makers should take seriously the potential risks of damage to their economic forecasts and manage these risks, we believe the appropriate channel for monetary policy," said Rosengren, a voting member of the FOMC this year.
Global Headwinds
"These downside risks reflect continued headwinds from weakness in countries that represent many of our major trading partners, and only limited data to support the expected path of inflation, "he said.
FOMC member forecasts inflation will rise to 1.6 percent in 2016 and hit the 2 percent target in 2018. Fed favorite gauge of price pressures increased Fed 0.4 percent in the 12 months to November and has not reached 2 percent in more than three years.
"further tightening will require data continues to be strong enough so that growth will be at or above potential, so that the Federal Reserve policy-makers can be confident that inflation will reach our target of 2 percent, "said Rosengren.
the median forecast of Fed officials puts the rate of the US economy long-term growth of 2 percent.
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