Boston Federal Reserve President Eric Rosengren is lining up against an apparent push to cut interest rates, telling CNBC in an interview Friday that the central bank can afford to be patient as long as the economy holds up.
"Now, should the economy change, if the trade situation changes dramatically, if we start getting surprised by how slow China or Europe are, then that's something we definitely should react to. But I think we should wait until we actually see the evidence that that's happening," Rosengren added.as well as multiple other policymakers who appear inclined to approve at least a quarter-point cut at the July 30-31 Federal Open Market Committee meeting.
Those favoring a reduction cite global weakness, the impact from tariffs, testy debt ceiling negotiations and weak inflation among their concerns. But Rosengren said that he's looking for concrete evidence of a slowdown, "and to date, I'm not seeing that." Approving an insurance cut would come at a time when the unemployment rate is near a 50-year low, the economy grew 3.1% in the first quarter and is projected to see a 2% gain in the second quarter, and recent data on retails sales and manufacturing, at least in the Philadelphia and New York Fed districts, was significantly better than expected.
However, Rosengren pointed out that the only recent times the Fed has approved an insurance cut have come to combat unusual events — the Sept. 11, 2001 terror attacks, the collapse of the Long Term Capital Management hedge fund in 1998 and the Black Monday stock market crash in 1987 prominent among them.
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