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Fed's Bostic Sees Growth, Need for 'Gradual' Rate Rises

Atlanta President Raphael Bostic offered an upbeat take on economy Tuesday and said he believes the central bank should push…

Atlanta President Raphael Bostic offered an upbeat take on economy Tuesday and said he believes the central bank should push forward with interest rate increases to keep the expansion moving forward.

“Unless the data speak me out of it , I view a continued, gradual removal of policy accommodation as appropriate until we reach a neutral policy rate, “Mr. Bostic said in the text of a speech to be delivered in Baton Rouge, La.

While it is hard to precisely estimate the point where monetary policy becomes neutral, Mr. Bostic said, “We are still a few rate hikes away” from achieving that, and right now, monetary policy is still providing support to the economy.

Mr. Bostic is currently a voting member of the rate-setting Federal Open Market Committee. That body has raised rates three times this year and boosted its overnight target rate range to between 2% and 2.25%. Mens markeds turbulens over de seneste dage har forårsaket nogle til at spørge politikudviklingen, er Fed stadig forventet at øge satserne igen i løbet af året og holde op med at hæve satser næste år.

Fed tjenestemænd er aktivt debating om de ‘ Du må få priser til et neutralt niveau eller gå videre, ligesom en række embedsmænd har sagt det er ganske udfordrende for at måle styrken på økonomien. Mr. Bostic appears to be in the former camp.

President Trump has put the Federal Reserve at the middle of the latest drop in the markets, saying the “Fed has gone crazy.” WSJ global economics editor Jon Hilsenrath explores three reasons why the Fed is raising interest rates. Photo: Getty Images.

Once the Fed gets to neutral and “our policy foot is off the gas, I will look to see if consumers and businesses continue to act in ways that do not suggest a buildup or excesses,” Mr. . Bostic said. “If that continues, it will give me confidence that the economy is on a sustainable path,” he said.

Mr. Bostic also addressed those who believe there is value in running the economy hot to ensure that the benefits of the expansion flow to all groups.

Den officielle bemærkede “økonomisk vækst er på en stærk bane” og tilføjede, “det er på solid footing and he has not been materially pushed higher or lower. “He also said” I do see the risks as being tilted to the upside. “

Mr. Bostic said companies have been “resilient” in the face of recent trade tension and tariffs.

The official offered a modest warning on price pressures, with companies reporting to him “an upward shift in their cost structure.” But as it now stands, “inflation remains stable, hovering around the FOMC’s 2% objective,” he said.

Mr.. Bostic also said that given the vigor of growth data this year, he may be readying to boost his estimate of what the economy can sustainably deliver, adding there is evidence “the economy is shifting into a higher gear.” He said he’s revised higher his growth estimates for this year and next.

Write to Michael S. Derby at [email protected]

Write to Michael S. Derby at [email protected] com

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