Atlanta Fed President Raphael Bostic told Bloomberg News yesterday, last week’s strong non-farm payroll report will probably mean we have to do a little more work… And I would expect that that would translate into us raising interest rates more than I have projected right now.”
Bostic previously indicated that he expects interest rate to peak at 5.00-5.25% to get policy sufficiently restrictive. Rate would then stay there throughout 2024. To him, a hike peak could come through an additional quarter-point hike after the two currently envisaged, without ruling out a half-point hike.
He expects inflation to be in the “low 3s” this year, still well above Fed’s 2% target. “Those last few tenths of a point can take a long time to be realized,” he said. “And so I want to make sure that we are in the right place before we start easing off our policy because the most important thing at this stage is to get our price stability measure as close to target as possible.”
