But he is one who is pushing the fed to take a more active role in pulling the economy out of the doldrums. The rise in the unemployment rate is the latest sign in Rosengren’s eyes that the Fed needs to act.
He says the Fed should purchase mortgage-backed securities as well as Treasuries in an open ended program and claims the Fed is not fulfilling either of its Congressional mandates. The two charges are to maintain sustainable employment as well as price stability.
The Fed has already conducted two bond purchasing programs titled QE1 and QE2 (QE for quantitative easing). But both of those had a fixed end date. Rosengren says a third program, which would be QE3, should not have a stated end.
Other Fed officials have been warning that the Fed should not do anything unless the inflation rate gets significantly lower. Fed chairman Ben Bernanke is expected to set the stage for what the Fed wants to do at a speech August 31 at Jackson Hole, WY.
Rosengren also wants the Fed to reduce interest rates on the cash banks leave with the Fed on reserve. That rate is currently .25%. Other Fed officials are concerned that cutting that interest rate will impact short-term lending activity. Rosengren said he does not support a cut to zero to mirror the European Central Bank (ECB), just gradual, incremental cuts.
Investors and, apparently, Fed officials seem to be getting impatient with the Fed’s wait-and-see stance. As in Europe, many would like to see more action and less talk.

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