SAN FRANCISCO – Federal Reserve Bank of Boston President Eric Rosengren said it’s “too soon” to tell whether the economy needs more stimulus from the central bank following a jobs report last week that was a “disappointment.”
“We’re still talking about what the appropriate exit strategy will be,” the regional bank chief said in an interview Monday with CNBC television. “As to timing, it depends on how the incoming data come in.”
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U.S. employers in May added 54,000 payroll jobs, the fewest number of workers in eight months, Labor Department figures showed on June 3. Unemployment unexpectedly rose to 9.1 percent from 9 percent a month earlier.
“It’s too soon to determine what the next steps for monetary policy will be,” Rosengren said. He added that the U.S. should grow about 3 percent in the second half of the year.
Rosengren said that the U.S. needs more fiscal austerity in the long run, adding that “a lot more austerity” could lead to expectations of a “slower-growing economy.”
“And so, I think actually our focus right now really should be on getting back to full employment,” he said.
In a speech last week, Rosengren said that U.S. money-market mutual funds may be vulnerable to Europe’s debt crisis. Concerns that money funds could hurt stability haven’t been adequately addressed by Congress or regulators to prevent a recurrence of the outflows after the bankruptcy of Lehman Brothers Holdings Inc. in 2008, Rosengren said in the June 3 speech at Stanford University.
“So, that is exactly why we should be spending some time focusing on how to make sure that in the next crisis, the money market funds aren’t playing a role in causing any of the instability that they did contribute to in the last crisis,” Rosengren said in a further excerpt from the interview distributed by email.
