Thread by @NickTimiraos

I spoke to Eric Rosengren recently about monetary policy, and he sounded a bit concerned. We've posted an edited transcript of the interview here.

He worries raising short-term rates fast could be very unpredictable and makes a case for selling assets wsj.com/articles/trans…

The Fed "continued to do asset purchases for too long," said Rosengren. (He cited health reasons when he resigned from the Boston Fed last September, nine months ahead of a mandatory retirement, following scrutiny of his financial disclosures.)

Rosengren isn't suggesting that these type of active balance sheet sales are what the Fed *will* do, but he lays out the argument for why it would be a better way to tighten financial conditions and depress risk taking.

Rosengren says that the Fed's new framework was a reasonable thing to do at the time the Fed did it, but that the current environment is one the Fed's new framework wasn't at all designed to address

He warns against allowing frameworks to "straitjacket" policy when the data turn

The Fed's December projections, which suggested a very soft landing, are "looking much less likely now," says Rosengren, because of repeated supply shocks and labor-market expectations for wages and salaries that aren't consistent with 2% inflation. wsj.com/articles/trans…