Federal Reserve Bank of Atlanta President Raphael Bostic stated that the central bank could opt for a third consecutive 0.75 percentage point increase in the federal funds rate if labor data stays strong and the inflation rate does not ease before the next policy meeting in September.
However, Bostic also said in a Wall Street Journal interview published on Thursday that he has not firmly decided whether he would support a 50 basis point or a 75 basis point rate hike. He also echoed the stance of some of his colleagues that, once rates reach an "appropriate level," they should "stay there" so the Fed could "purposefully analyze and assess how our policies are flowing through the economy." The Atlanta Fed leader dismissed quick rate cuts after the rate-hiking process, describing them as counterproductive as they could result in even more uncertainty.
Bostic urged the central bank to firmly focus on the inflation issue and "resist the temptation to be too reactionary" even if the economy slows down somewhat, as "some [economic] weakening is to be expected" while the Fed fights to get inflation on a path to the targeted 2%.
