Statements By Fed Officials Sound More Hawkish

Bostic: Fed’s policy rate needs to remain at 5.00%-5.25% range well into 2024
Atlanta Fed President Raphael Bostic stated in an essay published on Wednesday that he still holds the opinion that the policy rate needs to increase to the 5.00%-5.25% range and stay there far into 2024.

Bostic continued, “A narrative has emerged among some pundits that the Fed should consider altering its strategy with regard to boosting the federal funds rate lest we go too far and cause excessive economic suffering. History reminds us that if we relax before fully suppressing inflation, it may flare up again.

The US Dollar Index did not respond to these statements right away and was last spotted down 0.4% on the day at 104.52.

Two Federal Reserve officials speaking Wednesday said more aggressive interest rate hikes are necessary to slow inflation, as is the central bank keeping rates at elevated levels for some time.

Earlier on Wednesday, Minneapolis Fed President Neel Kashkari said Wednesday he is remaining “open-minded” about whether the Fed should raise rates by 25 or 50 basis points at its next policy meeting on March 21-22.

“I’m open-minded about whether it’s 25 or 50 basis points [next meeting],” Kashkari said during a Q&A at a Sioux Falls Business CEO event. “What’s more important is what we signal in the dot plot.”

Kashkari said in December, he jotted down raising interest rates up to 5.4% and holding rates at that level for an extended period. “At this point I haven’t decided what my dot is, but I would lean towards continuing to push up my rate and policy path,” he said.

“Given the data in the last month — the inflation report and strong jobs report — these are concerning data points suggesting we’re not making progress as fast as we’d like,” Kashkari said. “At the same time we don’t want to overreact.”

Kashkari is a voting member of the FOMC, the Fed committee that decides on monetary policy. Raphael Bostic, president of the Atlanta Federal Reserve, also stated on Wednesday that he thinks the Federal Reserve should increase its policy rate by 50 basis points, to a range of 5%-5.25%, and maintain it at that level long into 2024. Bostic won’t have any vote rights in 2023 but will have them in 2024.


In a piece of writing, Bostic stated, “We must decide when inflation is irrevocably moving lower. “We haven’t arrived yet. Hence, I believe that the federal funds rate should be increased to between 5% and 5.25% and should remain there until at least 2024. This will enable stronger regulations to eventually permeate the economy.