Fed's Rosengren sees three to four rate hikes next year
If inflation reaches the Fed's goal while the unemployment rate, now at a 16-year low of 4.2 percent, is below 4 percent that may be a signal that the economy could be overheating, Rosengren suggested in an interview.
To stabilize inflation at 2 percent, Rosengren said, "you might have to overshoot" by pushing rates higher than the level expected in a healthy economy. In September, Fed officials estimated that so-called neutral rate to be 2.8 percent.
The Fed left rates unchanged last month, but signaled it would likely raise them again in December, and three more times next year. ■