WASHINGTON – The Federal Reserve should only wind down its bond-buying program very gradually, said Eric Rosengren, president of the Boston Federal Reserve Bank, on Tuesday. "This recovery has already been too slow, and we do not want premature tightening of monetary policy to delay the return to more normal economic conditions," Rosengren said in a speech to the Connecticut Business & Industry Association meeting in Hartford, Conn. Despite signs of a pickup in growth shown in recent data, "the economy remains far from where we would like it to be," Rosengren said. A gradual reduction in accommodation is "very appropriate" given that the unemployment rate remains unusually high and the inflation rate remains unusually low, he said. In addition, a slow recovery puts great strains on unemployed workers and their families, and might impact the central bank's effort to reach its 2% target any time soon. Although most forecasters expect inflation to pick up, "that outcome has yet to clearly appear in the data," he said. Rosengren dissented from the Fed's decision last month to pare back its bond purchase program by $10 billion to $75 billion a month. The Boston Fed President will not be a voting member of the Fed's rate-setting committee this year.
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