By Jerry Kronenberg
HARTFORD, Conn. (MNI) – Boston Federal Reserve President Eric
Rosengren Friday said he thinks the U.S. unemployment rate can
eventually get down to around 5%, but “we’re so far away from
that (now)” that the Fed must do more to get joblessness down.
“Ideally, we would get back into the 5% to 6% range — and
my own expectation is in the long run it’d be at the lower end of that
distribution,” Rosengren added in a question-and-answer session
following an address he gave to the Connecticut Business & Industry
Association.
“Right now we’re so far away from that that we actually need to do
a lot more to get the unemployment rate down,” he said.
He spoke shortly after the Labor Department reported that the U.S.
jobless rate fell 0.2 point to 8.5% in December, Rosengren said whoever
wins the 2012 president race must make cutting joblessness their “major
objective.”
“The longer we’re at very elevated unemployment rates, the harder
it is get back to the 5% to 6% (range),” he said. “It really
is important not to stay at these elevated unemployment rates for a long
period of time — and that requires both fiscal and monetary policy to
try to (fix) that.”
However, the Boston Fed president said he does not expect any
fiscal policy that Congress and the White House agree to in an election
year to include broad deficit cutting.
“I’m not at all optimisic that over the course of this next year
we’ll get (a deficit-reduction agreement),” Rosengren said.
“Unfortunately, that may have to wait until after the election.”
He added that the Fed has little say over what any deficit deal
ultimately looks like.
“We do have a deficit that needs to be addressed,” Rosengren said.
“(But) whether that gets addressed primarily through taxes or
through spending cuts is really outside the domain of the Federal
Reserve,” he said.
** Market News International – Boston **
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