Commenting on yesterday’s US CPI report, which showed headline inflation surged to 9.1%, Atlanta Fed President Raphael Bostic said the “numbers suggest the trajectory is not moving in a positive way”. But, “how much I need to adapt is really the next question,” as he needed to study the “nuts and bolts” of the report.
“The top-line number is a source of concern,” Bostic said, “Everything is in play.” Asked if that included by raising rates by a full percentage point, following BoC’s surprised move, he replied, “it would mean everything.”
Fed Mester: No reason to have a smaller hike than 75bps
Cleveland President Loretta Mester told Bloomberg TV yesterday, the June inflation report was “uniformly bad”. “There was no good news in that report at all,” she said. “We at the Fed have to be very deliberate and intentional about continuing on this path of raising our interest rate until we get and see convincing evidence that inflation has turned a corner.”
“Certainly the inflation report suggests that there’s no reason to say that a smaller rate increase than we did last time, right, because nothing moved in that direction,” she added.
Asked if a 100bps hike is appropriate this month, Mester said, “We’re going to have the meeting and we’re going to talk about what the appropriate path of policy is. We don’t have to make a decision today.”