Market’s reaction to Boston Fed chief’s Quincy speech surprised business group
It’s not every day that world financial markets move on news out of Quincy.
But when you have the president of the Federal Reserve Bank of Boston, Eric Rosengren, headlining an event, speaking about the economy, and dropping a message about interest rates, well, the world listens.
Rosengren told members of the South Shore Chamber of Commerce at a Quincy hotel on Friday that there was “a reasonable case” for a measured rate increase and that inaction could overheat the US economy.
The speech jolted investors, who had doubted the central bank would raise rates this year, from 0.25 percent to 0.5 percent.
By 4 p.m. Friday, reality had set in, and the Dow Jones industrial average slid to 18,085, closing at its lowest point in two months. On Monday, it climbed back up some to close at 18,325.
“We had no idea that it was going to move the markets the way it did,” said Tom Kelly, chief financial officer of the South Shore Chamber of Commerce, who was in the audience.
The Boston Fed had called the chamber to schedule Rosengren’s presentation weeks ago, Kelly said.
The business group holds periodic breakfast gatherings throughout the year, usually when it has a speaker lined up, he said.
Rosengren’s speech drew a typical crowd, between 200 and 300 members.
Other keynote presenters have been more popular. When Suffolk Construction CEO John Fish, the chief backer of Boston’s 2024 Olympics bid, or US Senator Elizabeth Warren and her 2012 Senate election rival, Scott Brown, attended the breakfast, nearly 500 people packed into the room, Kelly said.
“The speaker will drive the attendance,” he said. “Friday’s was nothing out of the ordinary, until afterward. And then everybody was wishing they were here.”