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Federal Reserve Board Raphael Bostic sees interest rate hikes coming amid inflation

Federal Reserve Board President Raphael Bostic said Thursday that he expects interest rates to rise in late 2022 as he predicts continued economic growth and inflationary pressures.

Central bank officials told CNBC that they had “pencillered” a rate hike in the “late third, perhaps early fourth quarter” quarter of 2022. I will tighten it next year.

“Our experience from the pandemic was, to be honest, surprised upwards,” he said in a live “Closing Bell” interview. “I really adjusted my expectations to move forward.”

Bostic’s outlook has slowed down some recent economic data Atlanta Federation’s own GDP tracker GDP growth in the third quarter is estimated to be only 0.5%.

He said he believes that some of the barriers created by the Covid-19 pandemic will diminish, paving the way for stronger growth. But one of the challenges he doesn’t expect to disappear soon is inflation.

Other Fed officials call the current inflation rate: I’m running at the height for the first time in 30 years,temporary. Bostic rejects the concept. He said price pressures are emerging throughout the economy and will affect growth and policy.

“The turmoil will last longer than we expected,” Bostic said. “The labor market will not reach equilibrium as quickly as we wanted, but demand will remain high and the combination will mean we put inflationary pressure on us. The more we talk, the clearer it becomes, and this will continue until 2022. “

The Federal Reserve Board has kept benchmark short-term interest rates at near zero since the outbreak of the pandemic.In recent weeks, authorities have They are ready to start tapering Monthly asset purchases, probably from November. Bostic supported the move.

He also said he would closely watch the development of inflation. If the Federal Reserve needs to put a brake on price controls, Bostic said, “I’m going to take some decisive steps to prevent my colleagues and I from getting too deep in the damage. I would really encourage it. “

Bostic also dealt with Major announcements made by the Federal Reserve Board on Thursday, It said it banned top officials from buying and selling individual stocks and bonds and playing the derivatives market. The move follows the disclosure of the transaction that led to the resignation of the two federal regional presidents.

Bostic said he welcomed the change.

“I think this is a step to acknowledge and reflect the changing situation. As the market changes, we need to change our approach to maintain public confidence,” he said.

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Federal Reserve Board Raphael Bostic sees interest rate hikes coming amid inflation

Source link Federal Reserve Board Raphael Bostic sees interest rate hikes coming amid inflation

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