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World

Fed's Rosengren sees no clear, compelling case for further rate cuts

Boston Federal Reserve Bank President Eric Rosengren, one of two dissenting votes at the US central bank on its decision

Aug 02 2019

Boston Federal Reserve Bank President Eric Rosengren, one of two dissenting votes at the US central bank on its decision earlier this week to cut borrowing costs, said on Friday he saw no "clear and compelling case" for further interest-rate cuts.

"With the unemployment rate near 50-year lows and inflation likely to rise toward the 2 percent target, and with financial stability concerns being somewhat elevated given near-record equity prices and corporate leverage, I do not see a clear and compelling case for additional monetary accommodation at this time," Rosengren said in a statement.

Under the Fed's communications policy, Friday is the first day after a Fed rate-setting decision that Fed Chairman Jerome Powell's colleagues are permitted to air their views.

Rosengren did not make any reference to trade uncertainty or to newly imposed tariffs that on Thursday prompted traders to price in expectations for two more rate cuts this year, and more in 2020. Powell cited trade uncertainty as one reason the Fed had decided to cut rates.

Copyright Reuters, 2019