As Federal Reserve presidents Thomas Hoenig and Richard Fisher urge a turn away from the central bank's accommodative policy to ward off inflationary prospects, the head of the Federal Reserve Bank of Boston says those fears are overestimated and the Fed's policy is appropriate for now. Eric Rosengren said rising oil and food prices are causing shocks in the economy, and he believes an accommodative policy stance remain apropos for a recovery with anemic job growth. The Zero Interest Rate Policy keeps the cost of lending low. This is meant to encourage financial institutions to open liquidity and encourage spending. The Fed also purchases Treasuries under ZIRP to pump more money into the economy. Many are calling for an end to the policy in order to see if the economy can run on its own power. Not Rosengren. While speaking to the Massachusetts Chapter of the NAIOP Commercial Real Estate Development Association this week, Rosengren defended this accommodative approach, at least for now. "We at the Fed need to very closely monitor the data to make sure that inflation remains contained," Rosengren said. "The most likely result is that these supply shocks cause slower growth in the near term while having only a modest effect on longer-term inflation rates – which has been the U.S. experience since 1986." He said with unemployment still elevated and prospects of full employment a long ways off, the current policy stance is necessary. "With the core inflation rate over the prior year at a little above 1%, I anticipate only a gradual return of core and total inflation rates to something like our consensus 'stable' rate of about 2%, over the medium term," Rosengren said. "If the economic data continue to support this outlook then the current, accommodative stance of monetary policy is appropriate, and can remain in place and continue to support economic growth – so that we continue to make progress toward our goals of returning to full employment and a sustainable long-run inflation rate – the two elements of the Federal Reserve’s dual mandate from Congress." Fisher, president and CEO of the Federal Reserve Bank of Dallas, had said several times this year that a move away from current Fed policies is needed. Outgoing Kansas City Fed Bank President Hoenig has long maintained it is time for the Federal Reserve to shrink its balance sheet from $3 trillion to $1 trillion and raise the federal funds rate to the 1% range. Hoenig voted against every Fed policy decision last year because of his belief the current monetary policy isn't working. The Federal Reserve Act of 1913 gave the Federal Reserve responsibility for setting monetary policy. The Federal Open Market Committee holds eight regularly scheduled meetings per year in order to set the interest rate policy. Fisher currently can vote at the FOMC. Rosengren and Honing can not. Write to Kerri Panchuk.