Fed's Bostic: Full impact of policy on inflation won't be seen for months

Atlanta Federal Reserve President Raphael Bostic said on Tuesday that he wasn't expecting to see the full impact of monetary policy on inflation for months, as reported by Reuters.

Additional takeaways

"Fed must look to economic signals other than inflation as policy guideposts."

"Seen clues that tighter financial conditions may be pinching commercial real estate, banking."

"Tighter financial conditions have not yet constrained business activity enough to seriously dent inflation."

"Anticipating that more interest rate hikes will be needed."

"Indicators of broad-based easing of inflation need to be seen."

"There are glimmers of hope in goods inflation, need to see services inflation slow as well."

"Labor market remains tight, seeing upward pressure on wages."

"Fed's number one job is to tame unacceptably high inflation."

"Fed's policy actions risk inducing a recession but that is preferable to high inflation getting entrenched."

"Recession is not a foregone conclusion, Fed will try to avoid one if possible."

"There are many scenarios in which a recession could turn out to be mild."

"Once Fed reaches appropriately restrictive policy, it needs to stay there until there is convincing evidence inflation is firmly on track to 2% target."

Market reaction

US Dollar Index showed no immediate reaction to these comments and was last seen losing 0.6% on the day at 106.30.