Fed's Eric Rosengren in an interview with MNI

  • Fed will have to make technical adjustments when it comes to raising rates
  • Confident Fed has the tools needed to raise rates and keep the FFR within a 25bp target range
  • IOER will be the primary tool to utilise to bring rates up
  • Sees some uncertainty over the spread between IOER and other short term rates
  • Will get more knowledge as rates start to move and there will be a little bit of experimentation
  • Have to wait and see how markets react when we're at that point

Rosengren isn't on the full voting roster until next year but he's giving some insight into how the Fed will manage rates. It's not going to be as simple as chucking the rate up and kicking back for a while. Raising rates is just the first step to normalisation which is going to drag on for quite some times