Federal Reserve Bank of Boston President Eric Rosengren, the only dissenter against a Fed decision to taper bond buying, said he is now comfortable with the strategy to gradually cut monthly bond purchases in the future.
"I preferred to wait before beginning the program, but the program it looks like we're embarked on is a very gradual program and I think a gradual removal of accommodation is appropriate," Rosengren said today in an interview with Bloomberg News, indicating he would not persist in objecting to the Fed's strategy.
Rosengren, who doesn't vote on policy this year, signaled his endorsement for Chairman Ben S. Bernanke's strategy to reduce the pace of bond purchases in measured steps at each meeting of policy makers this year if the economy continues to improve. Fed officials last month decided to taper bond buying to $75 billion a month from $85 billion, citing an improved outlook for the labor market.
The Federal Open Market Committee is scheduled to meet Jan. 28-29 and will probably reduce purchases in $10 billion increments over the next seven meetings before ending them in December, according to a Bloomberg News survey of economists.
"That's a patient strategy in an environment where we're growing closer to 3 percent than 2 percent," Rosengren said.
In a speech today in Hartford, Connecticut, he said policy makers should cut stimulus "only very gradually" to avoid hurting the economy.
