Fed’s Rosengren Thinks Tapering Should Begin in October or November

The President of the Federal Reserve Bank of Boston, Eric Rosengren, said it would be appropriate to begin tapering the massive asset purchases after another month of strong jobs data.

“We have had two months in a row where we have created more than 900,000 jobs and the unemployment rate dropped by 0.5% to 5.4%. If we get another strong labor market report, I think that I would be supportive of announcing in September that we are ready to start the taper program,” he told CNBC on Monday.

“I think it’s appropriate to start in the fall. That would be October or November.”

He acknowledged that the criteria for starting to raise rates is that the Federal Reserve sees outcomes that are consistent with sustainable inflation at a little bit above 2% and full employment.

Accordingly, he believes a quicker drop in unemployment and wage increases keeping inflation above 2% “would be a reason to start thinking about raising rates more quickly, but I’m not expecting that.”