{"id":1246,"date":"2023-10-15T02:37:09","date_gmt":"2023-10-15T02:37:09","guid":{"rendered":"https:\/\/connectwithfund.com\/economy\/fed-has-lifted-interest-rates-high-enough-to-tame-inflation-bostic-suggests\/"},"modified":"2023-10-15T02:37:10","modified_gmt":"2023-10-15T02:37:10","slug":"fed-has-lifted-interest-rates-high-enough-to-tame-inflation-bostic-suggests","status":"publish","type":"post","link":"https:\/\/connectwithfund.com\/?p=1246","title":{"rendered":"Fed has lifted interest rates high enough to tame inflation, Bostic suggests"},"content":{"rendered":"
\n

The chief of the Atlanta Federal Reserve said further increases in interest rates probably aren\u2019t necessary to bring inflation back down to pre-pandemic levels.<\/p>\n

Raphael Bostic said the Fed can afford to be patient as long as inflation continues to slow. He spoke at an event Tuesday in Atlanta.<\/p>\n

\n

The annual rate of U.S. inflation has tapered to 3.7% from a 40-year high of 9.1% in 2022, based on the consumer-price index.<\/p>\n

The goal of the Fed is to reduce inflation to 2% a year. Bostic said, but the central bank doesn\u2019t have to get there \u201ctomorrow.\u201d<\/p>\n

\u201cI think our policy is sufficiently restrictive at this point to get us to the 2% target,\u201d Bostic said later in a call with reporters.<\/p>\n

Bostic also said he would be open to a \u201crobust\u201d debate about whether 2% is an good long-term inflation goal, but it would have to wait until after the Fed achieves its objective. Doing otherwise would damage the Fed\u2019s credibility, he said.<\/p>\n

The Fed in late September decided not to raise interest rates again, but left the door ajar for one more increase this year if inflation doesn\u2019t continue to slow.<\/p>\n

The leadership of the central bank, however, has become more divided about the next step. <\/p>\n

Twelve of the Fed\u2019s governors and regional bank presidents predict one more rate hike in 2023. <\/p>\n

Seven even see no need for further action, including Bostic. They are especially worried that further rate hikes could tip the economy into recession.<\/p>\n

Others such as Cleveland Fed President Loretta Mester and Fed Gov. Michelle Bowman favor a slightly more aggressive approach and believe the economy can handle it.<\/p>\n

The central bank has raised U.S. interest rates steadily over the past year and a half to try to douse the raging fires of inflation. It\u2019s lifted a key short-term interest rate to a top range of 5.5% from near zero in March 2022.<\/p>\n

What senior Fed officials do agree on is that interest rates need to be maintained at high levels for an extended period to make sure inflation is brought fully under control.<\/p>\n

Bostic said the Fed should leave rates at current levels for a \u201clong time.\u201d He is not a voting member this year of the Fed committee that sets interest rates.<\/p>\n

\u201cIf we are going to hold, I think it\u2019s appropriate for us to hold a long time,\u201d Bostic said. In the Fed\u2019s latest forecast, he predicted just one cut in interes rates in 2024 near the end of the year.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The chief of the Atlanta Federal Reserve said further increases in interest rates probably aren\u2019t necessary to bring inflation back down to pre-pandemic levels. Raphael Bostic said the Fed can afford to be patient as long as inflation continues to slow. He spoke at an event Tuesday in Atlanta. The annual rate of U.S. inflation has tapered to 3.7% from a 40-year high of 9.1% in 2022, based on the consumer-price index. The goal of the Fed is to reduce inflation to 2% a year. Bostic said, but the central bank doesn\u2019t have to get there \u201ctomorrow.\u201d \u201cI think our<\/p>\n","protected":false},"author":1,"featured_media":1247,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[],"class_list":["post-1246","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"yoast_head":"\nFed has lifted interest rates high enough to tame inflation, Bostic suggests | ConnectWithFund<\/title>\n<meta name=\"description\" content=\"The chief of the Atlanta Federal Reserve said further increases in interest rates probably aren\u2019t necessary to bring inflation back down to pre-pandemic\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/connectwithfund.com\/?p=1246\" \/>\n<meta property=\"og:locale\" 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