Federal Reserve Bank of Boston President Eric Rosengren cautioned that unemployment rate may rise above 6 percent in a speech Wednesday, where his sobering remarks suggested that the economic turmoil may continue for some time.
"On a national scale the 'headwinds' pushing against the economy look to be a good bit stronger than those experienced in the early 1990s," Rosengren said in prepared remarks before the Business and Industry Association of New Hampshire and the Greater Manchester Chamber of Commerce in New Hampshire.
Largely dovish in his remarks, Rosengren expressed concern that the economic headwinds "have not subsided as hoped."
Although he noted that second quarter growth was "better than many had feared," Rosengren did not hold out much hope that the growth will continue in the second half of the year as the impact of the economic stimulus payments subsides.
One bright spot in a largely bleak economy has been the strength of U.S. exports. However, Rosengren cautioned that as the global economy slows, demand for U.S. exports could subside, a scenario that "makes the outlook for many exports more restrained."
Unemployment may rise above 6 percent, Rosengren warned.
"With the economy expected to expand at a rate below its potential in the second half of this year, further increases in the unemployment rate are possible," he said. "It now appears that the national unemployment rate may rise above 6 percent, an increase of more than one and a quarter percentage points - or about 2 million workers - from last August, when the financial problems emerged."
Rosengren dedicated the majority of his speech to the credit crunch. Credit conditions remain "difficult," he noted, although conditions "would likely be much worse if the Federal Reserve had not lowered the Federal Funds rate and opened the additional liquidity facilities."
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.