Federal Reserve Bank of Atlanta President Raphael Bostic warned on Wednesday that should the central bank dip into the easing of monetary policy too soon, this could lead to inflation flaring up anew.
In an article posted on Atlanta Fed's website, Bostic wrote that "amid some signs that price pressures could be receding, a narrative has gained momentum among some commentators that the Fed should consider reversing its course of raising the federal funds rate lest we go too far and cause undue economic hardship."
Although he understands such concerns, he cautioned that the last time the Fed loosened its monetary policy "prematurely," back in the 1970s, it took 15 years for it to get inflation back to the target 2%. "We don't want a repeat, so we must defeat inflation now," Bostic stressed. He reiterated that the rate should be hiked to between 5% and 5.25% and remain there "until well into 2024."
