Federal Reserve Bank of Atlanta President Raphael Bostic said he continues to favor raising interest rates once more and then pausing as banking strains generate a headwind for the US economy.
(Bloomberg) — Federal Reserve Bank of Atlanta President Raphael Bostic said he continues to favor raising interest rates once more and then pausing as banking strains generate a headwind for the US economy.
“Our policy works with the lag,” he told reporters Thursday after speaking at Eastern Florida State College in Melbourne, Florida. “We’ll have moved firmly into restrictive space. And then I think it’s time for us to let the restrictive action work its way through. And that will take some time.”
Bostic, who does not vote on monetary policy this year, noted that financial conditions have tightened since the collapse of Silicon Valley Bank last month and “that started to do some of the work for us.”
Policymakers lifted borrowing costs by a quarter point last month, bringing the target on their benchmark rate to a range of 4.75% to 5% from nearly zero barely 12 months ago. They also projected they would hike once more this year, to 5.1%, according to their median forecast — a move that investors bet they will deliver at their upcoming May 2-3 meeting.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.