NEW YORK, (Reuters): U.S. Federal Reserve officials said recent economic data has been disappointing, with one suggesting it could delay the Fed’s exit from its extremely easy monetary policy.
“The slowdown does change when you think the timing would be for when an exit strategy would be appropriate,” Eric Rosengren, president of the Boston Federal Reserve Bank, told CNBC in an interview.
Rosengren, who is one of the more dovish Fed officials on inflation, said it was too early to discuss whether the Fed should embark on a third round of quantitative easing, but did not rule it out.
As well as cutting rates to near zero in December 2008, the Fed has more than tripled its balance sheet to around $2.7 trillion. Its $600 billion second round of quantitative easing, known as QE2, ends this month.
Two other Fed officials -- inflation hawks Philadelphia Fed President Charles Plosser and Dallas Fed President Richard Fisher -- voiced strong reluctance to doing more. Both Fisher and Plosser have votes on policy this year, Rosengren does not.
Fisher told a Market News International conference in New York that the Fed has done enough, if not too much, to support the economy.
“I personally do not foresee additional accommodation,”
Fisher said he expects economic growth to accelerate in the second half of this year. He added he expects inflation to be tempered as the temporary boost from rising energy and commodity prices fades.
Plosser, speaking at a Global Interdependence Center conference in Helsinki, said the hurdle for the Fed to do more would be “very high”. He said the Labor Department’s “disappointing” employment report on Friday had not fundamentally changed his medium-term outlook.
Gas prices, Europe may be weighing on US jobs -Obama
WASHINGTON, (Reuters): President Barack Obama, in his first direct comments about May’s weak U.S. jobs data that alarmed financial markets, said high gas prices and the European debt crisis were creating headwinds to growth.
“We don’t know yet what has happened in terms of this particular blip, what we do know is gas prices went up and that got consumers worried ... what’s happening in Europe has people nervous. So we’ve got some headwinds going up against us,” he told in Cleveland, Ohio.
The U.S. economy created just 54,000 new jobs last month -- significantly fewer than the 150,000 that had been forecast -- and unemployment edged up to 9.1 percent from 9 percent in April, according to data released on Friday.
“Over the last 15 months, we’ve created more than 2 million jobs in the private sector.
What has happened though is any given month, you are going to have sometimes better than expected jobs reports, sometimes worse than expected jobs reports,” he said in the interview.
Obama said after the data was released that the U.S. economy faced bumps in the road, but he did not comment directly on the disappointing employment report, which has raised concerns about the durability of the U.S. recovery.