With labor markets still soft and businesses unable to increase prices, the Fed is likely to keep monetary policy accommodative in order to continue to spur recovery, Boston Federal Reserve Bank president Eric Rosengren said Friday.

“Our research and analysis at the Boston Fed suggests that with significant capacity in labor markets, wages and salaries and the ability of businesses to increase prices are all likely to be restrained, resulting in little immediate inflationary pressures,” Rosengren told a Connecticut Economic Summit in Hartford, according to prepared text of his remarks released by the Fed.

“In my view this should allow for accommodative monetary policy to continue to support the economy until the underlying demand of consumers and businesses becomes self-sustaining,” he said.

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