Atlanta Fed President Raphael Bostic said on Saturday, “If the economy proceeds as I expect, I believe that 75 to 100 basis points of additional tightening will be warranted… It’s clear that more is needed, and I believe this level of the policy rate will be sufficient to rein in inflation over a reasonable time horizon.”
“In terms of pacing, assuming the economy evolves as I expect in the coming weeks, I would be comfortable starting the move away from 75-basis-point increases at the next meeting,” he added.
Bostic expected Fed to pause at some point to “let the economic dynamics play out,” given that it may take 12-24 months for the effect of rate hikes to be “fully realized.”
“I do not think we should continue raising rates until the inflation level has gotten down to 2%. Because of the lag dynamics I discussed earlier, this would guarantee an overshoot and a deep recession,” he said.
