Fed’s Rosengren (more of a hawk): further jobless rate drop risks undermining recovery

Speaking in San Diego (but from the Boston Fed — good trade)He adds:

  • Fed should consider updating policy framework
  • Further jobless rate drop risks undermining recovery
  • could set medium-term goals and inflation range
  • sites benefit of targeting 1.5% – 3% inflation range
  • lower-than-expected inflation not problem near-term
  • low and fixed inflation target is potential problem
  • any framework shipped should give fed more flexibility
  • Rosengren lays out case for fed to switch to adjustable inflation goal within fixed range
  • forecast errors on inflation, unemployment pose little challenge to gradual path of rate hikes

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