Fed's Rosengren says U.S. economy should see significant rebound this year
- The U.S. economy could see a significant rebound this year thanks to accommodative monetary and fiscal policy, but the labor market still has much room for improvement, Boston Federal Reserve Bank President Eric Rosengren said on Monday.
- "With labor-market slack still significant, and inflation still below the Federal Reserve’s 2 percent target, my perspective is that the current highly accommodative stance of monetary policy is appropriate," Rosengren said during a virtual discussion with business leaders.
- Coronavirus vaccines' ability to successfully prevent the spread of new variants of the virus would also be important, he said. "Assuming virus variants do not become especially problematic, we should see an unusually strong post-recession recovery," he said.
- Under a new framework adopted last year, Fed officials will be patient and leave rates near zero until inflation materializes - no longer raising rates in anticipation of higher inflation when the unemployment rate is low, Rosengren said.