Sees rate rise at the end of 2022
Feds Bostic (Pres. Atlanta Fed) is saying that he is one of the seven Fed officials who sees a rate rise by the end of 2022. Bostic is a voting member in 2021.
- Given upside surprises, has pulled first rate increased to late 2022
- Projects two additional quarter-point rate increases in 2023.
- Economy well on its way to recovery, sees inflation for 2021 at 3.4%, GDP growth that 7%
- Close to meeting "substantial further progress" standard to start bond tapering, appropriate to begin debate
- Fed will get clarity on labor markets in the fall. Needs to stay nimble and prepare to move.
- Perhaps three or four months more of solid job gains could put labor markets in very solid position
- Does not have a strong view on whether to taper mortgage bonds before treasuries
- Does not think housing market is in a bubble. Prices are rising based on supply and demand
- Does not want to be premature and point back on purchases but markets are functioning well
- Would prefer to hold off on raising interest rates until bond taper is complete.
