Fed’s Rosengren: unemployment is well above a longer-run sustainable rate

Aggressive policy easing will remain necessary for the simple reason that levels of both U.S. unemployment and inflation are not where the Federal Reserve wants them to be, a top U.S. central bank official said on Tuesday.

In a textbook argument that appeared to push back at some of his more hawkish peers, Boston Fed President Eric Rosengren brushed aside concerns over inflation and made it clear that he will support the central bank’s efforts to relieve U.S. joblessness, which was 7.8 percent last month.

Rosengren, a voting member of the Fed’s monetary policy panel this year, said the easing efforts have already encouraged Americans to buy homes and cars and other goods that help spur economic growth, for which he predicted an acceleration.

“Continued monetary accommodation is absolutely appropriate and indeed needed as long as we are projected to miss on both elements of the Fed’s dual mandate, inflation and employment,” he said in prepared remarks to the Greater Providence Chamber of Commerce.

“Currently, inflation is somewhat below our 2-percent target, and unemployment is well above a longer-run sustainable rate,” he added.

Choosen excerpts by Job Market Monitor from

via Fed’s Rosengren gives textbook argument for more easing | Reuters.