Fed Bostic said he remains open to a faster rate cut in 2022 and one or two rate hikes


© Reuters. File picture: Raphael W. Bostic, President and CEO of the Federal Reserve Bank of Atlanta, speaks at the European Financial Forum event in Dublin, Ireland, February 13, 2019. REUTERS / Clodagh Kilcoyne

Jonel Matt

(Reuters)-Atlanta Fed President Rafael Bostic said on Friday that he hopes the momentum of the U.S. economy will enable it to survive the next wave of the coronavirus pandemic, and said that “he is still accelerating the pace of the central bank’s decline. Open-minded” bonds.

Earlier on Friday, the World Health Organization said it had named the new variant of Omicron that was first discovered in South Africa “worrying.”

Bostic said that if the new variant of the Omicron coronavirus follows the pattern seen in previous variants, it should cause less economic recession than the Delta variant.

In an interview with Fox News, Bostic said: “We have a lot of momentum in the economy now,” and cited strong employment growth. “I hope this momentum can lead us through the next wave, no matter what.”

Bostic reiterated that he is willing to speed up the central bank’s slowing down of asset purchases so that officials can respond more flexibly to soaring inflation.

Bostic said that if the economy continues to develop along the same path, the Fed may complete asset purchases at the end of the first quarter or the beginning of the second quarter of next year, which may be “reasonable.” At the current rate, Fed officials will complete the cuts in purchases before the middle of next year. The decision makers will meet again from December 14th to 15th.

The announcement of the Omicron variant prompted investors on Friday to lower their expectations for the rate at which the Fed and other central banks will raise interest rates next year.

According to CME Group’s FedWatch tool, money market traders expect the probability of at least a 53.7% increase in interest rates at the Federal Open Market Committee meeting in June on Friday afternoon, down from 82.1% on Wednesday.

Bostic said on Friday that he did not rule out any possible actions, and said that if inflation remains high, the Fed is “definitely possible” to raise interest rates at least twice next year.

“We will not let inflation run out of control,” Bostic said.

Source link


Please enter your comment!
Please enter your name here