Boston Fed head: Despite positive signs, high jobless rate will persist

Unemployment is expected to remain at elevated rates for the next two years, Boston Federal Reserve Bank president and chief executive Eric Rosengren said at a meeting of the Greater Boston Chamber of Commerce today.
OCT 02, 2009
By  Sue Asci
Unemployment is expected to remain at elevated rates for the next two years, Boston Federal Reserve Bank president and chief executive Eric Rosengren said at a meeting of the Greater Boston Chamber of Commerce today. “I expect a slow recovery,” he said. “While I expect that we will see positive growth in the third and fourth quarter of this year, it will not be sufficient to make significant headway in improving labor market conditions right away.” There are some positive signs of economic recovery, however, Mr. Rosengren said. “The volume of short-term interbank lending is increasing,” he said. “And the stock prices of many of our major financial institutions reflect a renewed belief that they can weather their credit problems and be profitable.” Despite these “very positive signs,” Mr. Rosengren said, the “economic recovery remains fragile and quite capable of falling short of the more positive expectations.” “I personally expect our primary short-run concern to be disinflation rather than inflation,” he said. Mr. Rosengren expects a low inflation rate to persist over the next several years and said that commercial-real-estate write-offs likely will continue to weigh on heavily leveraged institutions. “I am concerned about capital losses among the commercial-real-estate sector that could cause losses for financial institutions,” Mr. Rosengren said. “Commercial real estate is not a large share of the [gross domestic product], but the write-offs are in leveraged institutions. I am concerned about capital losses among the commercial-real-estate sector that could cause losses for financial institutions,” Mr. Rosengren said. “Prices have come down. Hopefully, we'll start to see some stability, but in the commercial-real-estate market, we still have a way to go.”

Latest News

'Bogged down' advisors just want to have fun (again)
'Bogged down' advisors just want to have fun (again)

Jim Cahn, of Wealth Enhancement Group, lifts the lid on his firm's partnership model, his views on RIA M&A, and the widely slept-on reason why advisors are merging into larger organizations.

Vestwell unveils new emergency savings account offering
Vestwell unveils new emergency savings account offering

The fintech firm is cementing its status in the workplace savings space with its latest ESA offering, which employers can integrate into their existing benefits package.

'Money Mimosas' and other ways to show your Valentine financial love
'Money Mimosas' and other ways to show your Valentine financial love

Wealth managers offer unique ideas for couples to grow closer emotionally and financially.

Limra research finds financial confidence on the rise among Black American workers
Limra research finds financial confidence on the rise among Black American workers

Survey findings suggest increased sense of financial security and more optimistic 2025 outlook, while highlighting employers' role in ensuring retirement readiness.

DOGE efforts sideswipe muni bonds backed by federal lease payments
DOGE efforts sideswipe muni bonds backed by federal lease payments

Falling prices for some securities within the $4 trillion state and local government debt market spotlight how the push to shrink spending is sending shockwaves across the US.

SPONSORED Record growth: Interval funds emerge as key players in alternative investments

Blue Vault Alts Summit highlights the role of liquidity-focused funds in reshaping advisor strategies

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.