Expect an already slow economic recovery to slow down even more, the president of the Boston Federal Reserve Bank seems to be saying in both the Globe and Herald. Some tidbits from the Fed’s Eric Rosegren:
— The government needs to keep stimulating the economy, which is still quite weak, Rosengren suggests.
— There’s a worry that the economy could fall into Japanese style “deflation,” but Rosengren thinks that can be avoided.
— The Fed doesn’t look like it will hike interest rates for a while.
— Rosengren is cutting his estimates of economic growth in the second half of this year.
— Last but not least: Rosengren says a full housing market recovery is dependent on creation of new jobs:
The housing market is also showing signs of slowing now that the government’s popular $8,000 home-buyer tax credit has expired, he said. There’s a strong correlation between high unemployment and a sluggish housing market, he noted.
“To get foreclosures down, you need an improvement” in the employment picture, he said. Housing prices should remain flat as a result, he said.
File under: What a lousy day to quit smoking