Updates on global economic developments, and their potential impact on markets.
Fed’s Rosengren sees little difference in waiting until December for a rate hike
- In an interview with the WSJ, Boston Fed President Rosengren (voter) signaled officials will bypass November and look to December to tighten rates. Said there is no economic difference in waiting a month (to make a policy change) and downplayed US election as important for timing. Added he sees inflation reaching 2% goal relatively soon, and unemployment drifting below 4.7%. In a separate interview with MNI, Rosengren, looking past the next rate hike, said he favored thinking about how to reorient the Fed’s balance sheet to allow for a steeper yield curve. MNI said one option would be to let mortgage-backed securities mature and buy T-Bills, which would reduce duration. Added that another option, would to be a reverse of 2011’s Operation Twist – swapping longer-term securities for short-term ones.