Another round of quantitative easing by the Federal Reserve is "certainly a possibility" if there is a "bad economic shock," Boston Fed President Eric Rosengren told CNBC Wednesday.
Eric Rosengren
"It depends on what you think is the likelihood of what a bad economic shock is," he said. "So if you think there’s a shock from Europe, or you think that some of the fiscal discussion is gonna break down, those might be the types of incidents…[that] might affect how likely you think it is that we’ll have additional quantitative easing ."
Deflation would be another condition "under which it would make sense to have additional quantitative easing," he added.
Rosengren was interviewed after speaking at the Boston Fed's annual conference. He said it is "critical that we focus on strengthening the financial architecture" of U.S. banks "so that the struggles of one institution or group of them no longer poses risks to the broader global economy."
To CNBC he said most U.S. banks don't have huge direct exposure to the troubles in Europe. But "if a serious problem erupted in Europe, we would not be immune," he said, and that might be something the Fed would "have to react to."
CNBC
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