Fed’s Rosengren says central bank needs to keep eye on financial stability risks

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FILE PHOTO: The Federal Reserve Bank of Boston's President and CEO Eric S. Rosengren speaks in New York
FILE PHOTO: The Federal Reserve Bank of Boston’s President and CEO Eric S. Rosengren speaks in New York, April 17, 2013. REUTERS/Keith Bedford/File Photo

June 23, 2021

(Reuters) – Federal Reserve officials need to keep a close watch on financial stability risks, and rising home prices in particular should be monitored, Boston Fed President Eric Rosengren said on Wednesday.

“Long periods of very low interest rates do encourage people to take risk,” Rosengren said during a virtual conversation organized by the New England chapter of the National Association of Corporate Directors.

The surge in home prices seen in some markets is similar to the rise seen during the boom and bust of the last housing crisis, though that pattern may not necessarily be repeated this time around, Rosengren said.

(Reporting by Jonnelle Marte, Editing by Rosalba O’Brien)