Fed’s Bostic says tighter monetary policy hasn’t dented inflation yet
November 15, 2022 | Ann Saphir | Reuters
Atlanta Federal Reserve President Raphael Bostic said on Tuesday he sees little evidence that the U.S. central bank’s aggressive monetary policy tightening is slowing inflation, and borrowing costs will have to rise further for that to happen.
“Tighter money has not yet constrained business activity enough to seriously dent inflation,” Bostic said in an essay to be posted on the Atlanta Fed’s website. “I anticipate that more rate hikes will be needed” to get policy sufficiently restrictive to return inflation to the Fed’s 2% target, he said.
Because it will likely take months before the full impact of higher interest rates will be felt on inflation “we must look to economic signals other than inflation as guideposts along our path,” Bostic said.
But labor markets remain tight, keeping upward pressure on wages, and though there has been some easing in goods prices, services inflation continues to tick up, Bostic said.
