Speaking at a meeting of the Portland Regional Chamber of Commerce, a Boston Federal Reserve Bank official said Tuesday that the economy is continuing to improve, which will likely result in rate hikes next month.

Eric Rosengren, president of the Boston Fed, pointed to a number of indicators of the U.S. economy’s gradual improvement – including October’s payroll employment growth of 161,000 jobs and the unemployment rate at 4.9 percent – as evidence that the economy is at or close to most economists’ estimates of “full employment.”

An advocate of gradual tightening of monetary policy, Rosengren said he expects the Fed will raise interest rates when it meets next month unless there’s some “significant negative economic news over the next month,” according to a summary of his remarks posted on the Federal Reserve Bank of Boston’s website.

“I would much prefer that tightening be gradual, and that policymakers try to avoid circumstances in which we need to tighten more quickly,” said Rosengren. “My concern is that more rapid tightening, were it necessary, could risk disrupting the recovery” that is now attaining full employment and price stability.

He said he expects the Fed’s goal of achieving 2 percent inflation will be met over the next year. And he warned that if the unemployment level continues to decline, it could become unsustainable and lead to faster changes in monetary policy.

Rosengren voted to raise interest rates when the Fed met in September, but declined to do so this month because he thought indicators were well aligned for an increase in December.

“Going forward, I will be attuned to assessing whether my forecast – continued progress toward achieving our inflation target and employment goals – is on track,” he said.


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