Federal Reserve Bank of Atlanta President Raphael Bostic said he still prefers to raise rates by another quarter percentage point when officials meet later this month, but is mulling whether central bankers need to lift borrowing costs higher than the range of 5% to 5.25% he’s endorsed to defeat inflation. “I let the data guide me,” Bostic told reporters in a press briefing. “If the data continue to come in suggesting the economy is stronger than I had projected, I’ll adjust my policy trajectory.”
Bostic, who isn’t a voter on monetary policy in 2023, earlier this week reiterated his call for the Fed’s key policy rate to be lifted to around 5.1% this year and then kept there until well into 2024.
The Atlanta Fed chief acknowledged data have come in stronger and said he wasn’t prepared to adjust his formal estimate until going through a comprehensive pre-meeting review with his staff.
‘’I want to be completely clear: There is a case to be made that we need to go higher,” Bostic said. “Jobs have come in stronger than we expected. Inflation is remaining stubborn at elevated levels. Consumer spending is strong. Labor markets remain quite tight.”
US central bankers are waging their most aggressive action against high inflation in a generation. Officials lifted their benchmark lending rate by a quarter of a percentage point at the start of February, bringing the target to a range of 4.5% to 4.75%. That was a step down from the half percentage-point increase at their December meeting, which followed four consecutive jumbo-sized 75 basis-point hikes. Market expectations for the Fed peak rate have climbed to about 5.5% in September following indications of US economic strength, including an acceleration in employment growth in January and improvement in manufacturing, as well as higher inflation. Fed officials led by Chair Jerome Powell have predicted inflation will fall this year, while warning month-to-month changes will be bumpy.Policymakers will meet again on March 21-22 where they are expected to raise rates by a quarter point, though a couple Fed officials have raised the possibility of a half-point move. NN: I like to keep things simple. Inflation is still out of control. Jobs have come in much stronger. Inflation is remaining stubborn at elevated levels. Consumer spending is strong. Labor markets remain quite tight. Which means the FED is losing the battle an they will raise rates a LOT more then the markets are calculating. Its a binary trade the FED is not done raising rates. The economy will be entering into a deep dark depression and the hosing and stock markets will collapse.