ATLANTA, Oct 3 (Reuters) – There is no urgency for the Federal Reserve to raise its policy rate again now that the economy is slowing and inflation is falling, but it will likely be “a while” before a cut is appropriate. , he was on Tuesday the president of the Atlanta entity, Raphael Bostic.
“I’m not in a hurry to raise rates, nor to reduce them,” Bostic said at an Atlanta Chamber of Commerce event where he tried to combine caution about further increases with the commitment to adopt the Federal Open. Market Committee. the “higher for longer” strategy for this phase of its fight against inflation.
“I don’t think it’s urgent for us to do anything else… I want us to wait. I think that is appropriate for a long time,” said Bostic.
Fed policymakers almost unanimously believe that at most a quarter-point rate hike is needed before the central bank completes a hike cycle that begins in March 2022 to prevent an acceleration of inflation in which consumer prices rose at an annual rate of up to 9 %.
Bostic was one of seven of 19 officials who in September indicated that the Fed could leave the rate in the current range of between 5.25% and 5.5% and continue to see inflation decline, without setting a more economic pressure than necessary. .
Current rate policy “is already starting to slow the economy. How fast is it going to slow down? ” Bostic asked, calling for a “patient” approach to any new policy changes. which gives the economy more time to adjust to what the Fed. it has been done.
“The slowdown is happening. Let’s make it happen. Let’s move the world and be patient. (Inflation) doesn’t have to be 2% tomorrow,” said Bostic.
The Fed will meet from October 31 to November 1. Many investors are hoping that recent data showing a decline in the underlying rate of inflation will lead the central bank to keep the official benchmark rate steady. on.
Twelve of the 19 officials, however, predicted in September that another rate increase would be necessary, and this week they laid out the reasons why it was necessary.
Friday’s jobs report is the next key data point in that debate, and officials will be watching to see if hiring continues to slow and if other labor market indicators move more in line with trends seen before the pandemic.