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The markets are awaiting the testimony of US Federal Reserve Chairman, Jerome Powell, today, but it is not only Jerome Powell who will be speaking today but also several US Fed officials, first and foremost Raphael Bostic.
Atlanta Federal Reserve President Raphael Bostic told Reuters on Tuesday that March would be a reasonable time for the first-rate increase and added that the runoff of the balance sheet could begin soon after.
“Balance sheet should decline faster than in last tightening cycle, perhaps by $100 billion a month or more with no phase-in.”
“Fed could easily pull $1.5 trillion of excess liquidity from the financial system, then watch market reaction for further balance sheet reductions.”
“Expecting three rate hikes in 2022, with risks pointed towards a fourth on the possibility of higher inflation.”
“Full process of balance sheet runoff should be geared to end in a couple of years not drag on.”
Comments from business leaders lead me to believe inflation is likely to last longer than expected.”
Raphael Bostic
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