Fed's Bostic in an interview with Yahoo finance says:
- 50 basis point hike is not preferred policy action for a March meeting
- Fed is not fixed on a set policy progression
- Still has three rate hikes penciled in for 2022
- He is laser focused on the next meeting and how data on inflation, jobs is evolving
- Hard to anticipate too much what the long arc of policy will be at this point
- Penciled in 3% inflation for full year 2022, anticipate labor supply disruptions will ease
- If inflation responds quickly, Fed could go slower, but that is not base case since businesses appear to have built in price increases already
- January jobs report likely will be a little lower than recent months showing omicron influences
- Hopeful that job growth will rebound in February and March
- Should get a few rate moves in and then reduce the size of the balance sheet
- Would like to start balance sheet reduction as soon as possible
- 10 year into your treasury spread has narrowed because of uncertainty about how policy will play out
- Fed should manage policy to avoid undue flattening of the yield curve
- possibility that the Fed will cause a recession is relatively far off
Over the weekend, in an interview with the Financial Times, Bostic said:
- 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
For his comments from over the weekend, CLICK HERE.
