A disappointing rate of growth since last winter means that the preconditions for a rate hike have not been met, said Eric Rosengren, the Boston Fed President, on Monday. In a speech to a business group in Hartford, Rosengren expressed some skepticism that the weak first-quarter growth was largely due to temporary factors, as many Fed officials, including Chairwoman Janet Yellen, have suggested. "The data were not just weak during the worst of winter; they were also weak before the storms and have been weaker than expected ever since," Rosengren said. The Fed cannot hike based only on a forecast of better times, but needs "confirmation" in the numbers, he said, "If the economy continues to grow at the same pace we witnessed on average in the current and the past two quarters, I do not expect to see timely improvements in the unemployment rate and sufficient progress toward the 2% inflation target. This, in my view, makes a compelling argument for continued patience in monetary policy," said Rosengren, a dovish Fed member who does not vote on policy this year.
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