Fed’s Bostic indicates bias towards further hikes, no cut until well into 2024

In an interview with CNBC, Atlanta Fed President Raphael Bostic emphasized the importance of combating inflation, which he deems as “job No. 1”. He expressed his readiness to bear the cost necessary to achieve the Fed’s target, underscoring the need for a more aggressive stance on rate hikes given the current economic scenario.

Bostic stated, “What we’ve seen is that inflation has been persistently high, consumers have been really resilient in terms of their spending, and labor markets remain extremely tight. All of those suggests that there’s still going to be upward pressure on prices.” His comments highlight the ongoing pressures that may trigger further inflationary spikes.

He showcased leaning towards a proactive approach in dealing with inflation, stating, “If there’s going to be a bias to action, for me it would be a bias to increase a little further as opposed to cut.”

Bostic remained confident in Fed’s policy measures, asserting, “There’s still a lot of confidence that our policies are going to be able to get inflation back down to our 2% target.” He made clear Fed’s determination to ensure this target is met, even if it means holding off on rate cuts until well into 2024.