Atlanta Fed President Raphael Bostic said market reaction to UK government’s new growth plan, with sharp volatility in Sterling, was a “real concern”. There’s “a fear that the new actions will add uncertainty to the economy.”
The key question will be what does this mean for ultimately weakening the European economy, which is an important consideration for how the U.S. economy is going to perform,” he added.
But for now, Bostic gave no indication on how Fed could respond to the development in the UK. “The more important thing is that we need to get inflation under control,” he said. “Until that happens, we’re going to see I think a lot of volatility in the marketplace in all directions.”