Low rates could affect stability, Rosengren says

Low interest rates raise issues about financial stability and policymakers must take heed, Federal Reserve Bank of Boston President Eric Rosengren said Tuesday.

“I believe monetary policymakers must factor in financial stability concerns,” Rosengren said in a speech in Amsterdam, according to materials released by the Fed.

“Financial intermediaries will need to factor in the possibility of lower rates, particularly during economic downturns, and flatter yield curves,” he said.

Low rates “have implications for monetary policy responsiveness to negative shocks,” he said.

rosengren-eric-bl-082516
Eric Rosengren, president and chief executive officer of the Federal Reserve Bank of Boston, speaks during a meeting with a coalition of activists on the sidelines of the Jackson Hole economic symposium, sponsored by the Federal Reserve Bank of Kansas City, in Moran, Wyoming, U.S., on Thursday, Aug. 25, 2016. Federal Reserve Vice Chairman Stanley Fischer and 10 of his colleagues met Thursday with a coalition of activists to hear complaints about the U.S. central bank, in a first-of-its-kind event on the sidelines of an annual policy retreat in Jackson Hole, Wyoming. Photographer: David Paul Morris/Bloomberg

For reprint and licensing requests for this article, click here.
Monetary policy Federal Reserve Federal Reserve Bank of Boston FOMC
MORE FROM BOND BUYER