The rate increase of 0.25 points last week. of the FED It has been talked about for a long time how many times it will increase interest rates in 2022.
While FED members agree on rate hike Fed Atlanta Chairman Raphael Bosticexpressed his thoughts on the matter.
Raphael Bostic said on Monday Due to the increasing uncertainty with the Russian invasion of Ukraine, He said he was in favor of six rate hikes in 2022.
“I am in favor of six rate hikes in 2022 and twice in 2023.
I am aware that I am below average compared to other Fed members, but in my mind, the increasing level of uncertainty is a priority issue and I have reined in my thoughts that an aggressive rate hike should start now.”
Raphael Bostic, who said that the Fed sees the neutral interest rate as 2.25%, also stated that he does not know exactly whether his own forecasts for rate hikes this year will hold up.
“It can go faster or slower than that if things happen in a way that seems warranted.
I’m really observing and adapting in real time because there seems to be a lot going on. The world constantly surprises me.”
Stating that the uncertainty arising from the war between Russia and Ukraine will reduce economic activity, the head of FED Atlanta, “Risks are twofold” said.
“If demand declines in the face of economic uncertainty or the removal of monetary policy adjustment, the appropriate path may be narrower than I currently envision.
However, there may be other developments such as shifts in procurement strategies that could mean higher costs. That could mean a steeper-than-expected policy.”
Describing the US labor market as tight, Bostic finally emphasized that he sees the inflation issue as the main concern for policy makers this year.
Jerome Powell Meeting under the chairmanship of the Fed, last week, for the first time since 2018, 8 votes to 1, the Fed decided to increase the interest rate by 25 basis points. Voting in opposition at the meeting, the FED St. Louis Fed President James Bullard said that interest rates should be increased by 50 basis points.
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