Tuesday, May 30, 2023
HomeEconomyFed may 'pull back' 75bps rate hike if inflation slows, Bostic says

Fed may 'pull back' 75bps rate hike if inflation slows, Bostic says

WASHINGTON (Reuters) – Atlanta Fed President Rafael Beau may have reason to “pull back” its 75 basis point rate hike if new data shows a “significant” slowdown in inflation Stick said in an article published on Tuesday.

“I don’t think our tightening is over. Inflation is still too high,” Bostic wrote in an article published on the region’s bank’s website. “That said, the upcoming data – if they make it clear that inflation has started to slow – may give us a reason to dial back … we’ll have to see how those numbers come in.”

Slowdown Bostic said July inflation “represented a moderation”, while noting that price pressures remained “stubbornly pervasive”.

Fed to receive August inflation report by September 20- policy meeting, officials expected Rate hike 50 or

basis points will be approved.

Aside from the slowdown in the pace of inflation in July, other data showed key parts of the economy remained tight – including data on Tuesday showing job vacancies remained high as of July, a possible sign of continued economic growth wage pressure.

Bostic called the overall picture “ambiguous” and said that while focusing on the path of inflation, he was also sensitive and moved too aggressively Higher interest rates also pose risks.

“There are downsides to acting too aggressively or too timidly,” Bostic wrote, entrenched high inflation looms and lost growth if the Fed doesn’t squeeze it out of the economy And higher unemployment is the result of “severe policy tightening”.



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