Fed’s Rosengren: Low inflation and wage growth urges patience

Boston Fed President Eric Rosengren (non-voter) is one of the most dovish FOMC members so his comments shouldn’t be a surprise.

• Low core inflation and wage growth requires patient monetary policy
• Patient monetary policy is prudent until Fed can confidently expect inflation to return to 2%
• Allow tighter monetary policy to spur wage growth
• Data not yet signaling clear upward inflation trend

Rosengren delivered a speech at the American Economic Association in Boston today.

“I believe the continued very low core inflation and wage growth numbers provide ample justification for patience,” Rosengren said. “A patient approach to policy is prudent until we can more confidently expect that inflation will return to the Fed’s 2 percent target over the next several years.”