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Rosengren said he wanted the Federal Open Market
Committee to debate about whether the United States' inflation
target of 2 per cent was too low, the FT reported.
If inflation targets were set higher, it could mean a higher
long-run policy rate, which would mean more room to cut interest
rates before hitting the so-called "zero lower bound", Rosengren,
who does not have a vote on the Fed's policy-setting committee
this year, told FT.
The U.S. labor market needs to strengthen further and inflation
needs to show signs of heading back up to 2 percent before the
Federal Reserve will raise interest rates, Rosengren said in a
speech in London last week.
The Fed set a 2 percent inflation target in 2012, under a dual
mandate to seek maximum employment and price stability, a goal
it has not hit since that year while its target rate has been at
near-zero levels since 2008, the FT said.
Rosengren also said he expects first-quarter U.S. growth to be
slower than the 2.2 percent recorded for the end of last year,
the newspaper reported.
In a sign of an uptick in inflation, U.S. consumer prices
increased for a second straight month in March on rising
gasoline and housing costs.
Rosengren could not be reached for comments outside regular U.S.
business hours.
(Reporting by Ismail Shakil in Bengaluru; Editing by Anupama
Dwivedi)
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