Fed’s Bostic Says Rates Need to Remain in Restrictive Territory
Federal Reserve Bank of Atlanta President Raphael Bostic said the US central bank should hold interest rates where they are, at a level that continues to put downward pressure on inflation.
“We need to stay where we are,” Bostic said Wednesday during a housing conference in Atlanta.
“You can say that we’re hitting our employment mandate, and now we have to get the price stability mandate under control,” he added. “We need to be in a restrictive posture.”
Policymakers left rates unchanged last month, giving themselves more time to wait for further progress on inflation and to learn more about how President Donald Trump’s policies could affect the economy. The Fed’s benchmark rate is in a target range of 4.25% to 4.5%, down a full percentage point from September.
New data on the Fed’s favored inflation gauge, the personal consumption expenditures price index, is due Friday.
Bostic said last week his baseline expectation is for the Fed to lower rates twice this year, in line with what he penciled into his projections in December. But, he said, there is more uncertainty around that forecast. Officials meet next March 18-19.
Source : Bloomberg
