Federal Reserve Bank of Atlanta President Raphael Bostic (pictured) shared on Wednesday that he wants to give more time for the economy to adjust to the monetary policy before further interest rate hikes are introduced.
In remarks posted on Atlanta Fed's website, Bostic explained that pushing for more rate increases could "needlessly drain too much momentum from the economy." As restrictive policy has only been in place for "eight to nine months," the effects of tighter monetary policy on the real economy "are just beginning to take hold," he said.
Bostic underlined that "waiting" should not be confused with "inaction." If inflation continues to cool, "our current policy stance effectively becomes tighter, as the real interest rate, which is the difference between our rate and the rate of inflation, will increase," the policymaker noted, calling this dynamic "passive tightening."
