Fed: Raphael Bostic pleads for a lasting monetary status quo

(Boursier.com) — Atlanta Fed President Raphael Bostic said yesterday, as quoted by Yahoo Finance, that he believes the Federal Reserve should keep interest rates at current levels at least until at the end of this year to better gauge the impact of the central bank’s earlier aggressive rate hikes on the US economy. “My baseline is that we should stay at this level for the rest of the year,” Bostic told Yahoo Finance in an interview. “I actually think we’re still in the early stages of our monetary policy tightening, starting to influence the economy significantly. I just feel like we have some time to let that play out. and see exactly how the economy reacts to our policy,” says Bostic, who therefore adopts a “softer” tone than Fed Chairman Jerome Powell. Bostic said it would take between 6 and 24 months for the US economy to feel the full effect of the Fed’s monetary measures.

The Fed raised rates from a range of 0% to 0.25% to the current level of 5 to 5.25% in 10 meetings from March 2022 to last May. “I still think we’re still early in the game in terms of the impact of our restrictive policies, and I’m very comfortable waiting,” said Bostic, one of the Fed’s most dovish members. . The majority of Fed officials expect between one and three more rate hikes this year to further cool inflation, according to new Fed forecasts released last week.