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A senior US central banker said on Wednesday that the Federal Reserve should lift interest rates at every other meeting this year, leading to a total of four increases in 2017, barring a shift in the economic outlook.
Eric Rosengren, head of the Boston Federal Reserve, said during a speech at the Boston Economic Club that three more rate increases this year would be “consistent with comments from [Federal Open Market Committee] participants stating that the path of normalising rates will be gradual”.
He said the pace he has recommended should be seen as the “default, unless economic data come in inconsistent with forecasts”.
The view from Mr Rosengren, who is not a member of the Fed’s policy-setting board this year, is more hawkish than the Fed’s median forecast of three rate increases this year. The Fed has already raised rates once this year, at its March 14-15 meeting.
“At present, the perception seems to be that the outcome of each FOMC meeting depends on nuances of incoming data, with the base case being no change in rates,” he said.
“I would like to suggest a somewhat different stance for policy over this year: an expectation to tighten at every other meeting unless incoming data are materially inconsistent with the forecast.”
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