Central Banks

More Rosengren: Tight labor market will feed into inflation at some point

More Rosengren: Tight labor market will feed into inflation at some point

Boston Fed President 

  • There is no perfect price index
  • Changes in technology is a big challenge to capture
  • Import not to allow inflation expectations to slip
  • Tight labor market to affect inflation at some point
  • Increase in US corporate debt is worrisome
  • People should be comfortable with more inflation than the US has seen in the last 15 – 20 years
  • Fed’s balance sheet is very close to being normalized
  • Balance sheet is being normalized at a much higher level than before the 2008 financial crisis
  • Rise in US corporate debt could increase severity and duration of recession
  • Monetary policy is not doing much to lower rates at the short or long end of the yield curve
  • I’m not a big fan of negative interest rates
  • it may be hard to distinguish one time price change of tariffs requiring no response from persistently higher inflation in a tight labor market
  • an issue with trade should not require a looser monetary policy
  • we are getting much closer to where the balance sheet might need to expand


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