The market volatility seen over the past month is a “healthy realization” by investors that the risks are two-sided, said Boston Fed President Eric Rosengren on Friday. “Unsustainably strong growth that leads to excessive inflation or financial imbalances is not as much a risk as growth that falls short,” Rosengren said in a speech to the Chamber of Commerce in Springfield, MA. The Boston Fed president was upbeat about the outlook, saying the recent weak consumer spending was likely a temporary pause. Rosengren said he favors a pace of rate hikes “perhaps a bit faster” that the three, one-quarter point increases, that the Fed has forecast for this year.
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