Atlanta Fed President Raphael Bostic said yesterday that a pause in tightening in September might be a good idea, because market responses had been “far stronger than what we’ve historically seen.” “I want to make sure I truly understand the pace of change that’s associated with our policy response,” Bostic said.

By September, some of the uncertainty over the economy could be resolved. Bostic expected that could lead to a “pretty significant reduction in inflation.”

Yet, he’s “fully comfortable” to raise interest rates above neutral if inflation doesn’t come down. “The goal is to get inflation down. We’ve got to really tackle it in an intentional, persistent way,” he said. “I want to be open to both possibilities.”

Fed left federal funds rate unchanged at 2.25-2.50% as widely expected. It maintained the the Committee will be “patient” regarding future adjustments to interest rates. Nevertheless, Fed talks down the weak NFP growth in February, and maintained that “job gains have been solid, on average, in recent month”. Also, unemployment rate “remained low”.

Fed also talks down easing in inflation and said it’s “largely a result of lower energy prices”. Core inflation remains “near 2 percent”. Though, growth in household spending and business fixed investments slowed in Q1.

Full statement below:

Federal Reserve Issues FOMC Statement

Information received since the Federal Open Market Committee met in January indicates that the labor market remains strong but that growth of economic activity has slowed from its solid rate in the fourth quarter. Payroll employment was little changed in February, but job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Recent indicators point to slower growth of household spending and business fixed investment in the first quarter. On a 12-month basis, overall inflation has declined, largely as a result of lower energy prices; inflation for items other than food and energy remains near 2 percent. On balance, market-based measures of inflation compensation have remained low in recent months, and survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 2-1/4 to 2-1/2 percent. The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes. In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the FOMC monetary policy action were: Jerome H. Powell, Chairman; John C. Williams, Vice Chairman; Michelle W. Bowman; Lael Brainard; James Bullard; Richard H. Clarida; Charles L. Evans; Esther L. George; Randal K. Quarles; and Eric S. Rosengren.