Fed’s Bostic: Could use half-point rate rises if needed – FT

Dhwani Mehta FXStreet

In an interview with the Financial Times (FT) on Sunday, Atlanta Federal Reserve (Fed) President Raphael Bostic said he could lean towards a 50-basis point (bps) rate hike, depending on the economic data.

Key quotes

Every option is on the table for every meeting.

If the data say that things have evolved in a way that a 50-basis point move is required or [would] be appropriate, then I am going to lean into that.

Comfortable with moving in successive meetings.

Sticks to 3 rate increases in 2022 with the first in March.

Will be looking for deceleration in monthly CPI price gains.

Looking for further evidence that rising wages are not feeding meaningfully into higher inflation.

Encouraged by latest employment cost index and expects a moderation in wage growth going forward.

Markets are acting rationally and responding with tighter financial markets.

Supports reducing the $9T balance sheet as quickly as possible without impairing market functioning.

Optimistic on the economy.

If we do three hikes, that'll still leave our policy in a very accomodative space.

Market implications

The US dollar is on a corrective move lower after the recent upsurge. Bulls take a breather ahead of key central bank meetings and the US NFP release.

The US dollar index is currently trading at 97.18, down 0.10% on the day, having hit multi-month highs at 97.44 on Friday.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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