Fed’s Rosengren (moderate, voter): sees no clarion call to alter current policy in the near term; Fed can afford to wait and see if economic forecasts materialize - comments in NYC
- Tight labor markets are one reason to expect inflation to rise to the Fed's 2% target; tariffs could lift inflation to 2% more rapidly
- Current policy is slightly accommodative and consistent with inflation returning to 2% target
- Inflation could return to Fed target more quickly if tariffs are imposed- Assumes that unhelpful trade uncertainty will be transitory and have modest effect on US economy
- If US tariffs are widespread and prolonged, the effect on markets and growth would be larger
- Global growth worries have subsided since early 2019