Fed’s Rosengren: Significant slack remains in the economy

Boston Federal Reserve President Eric Rosengren said on Wednesday that the current policy will remain accommodative until the labor market can consistently help deliver on the Fed’s 2% inflation goal, as reported by Reuters.

Additional takeaways

“Fiscal policy has been unusually stimulative and is providing a major boost to the pandemic-shocked economy.”

“Significant slack remains in the economy.”

“Oil prices, pent up demand for goods and shipping delays will temporarily distort inflation numbers this spring.”

“The most likely outcome remains that inflation will normalize close to 2%.”

Market reaction

These remarks don’t seem to be having a significant impact on the greenback’s performance against its rivals. As of writing, the US Dollar Index was virtually unchanged on the day at 91.28.

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