Federal Reserve official Raphael Bostic reiterated that he favors keeping borrowing costs on hold but that Chair Jerome Powell and other colleagues don’t agree with him.
(Bloomberg) — Federal Reserve official Raphael Bostic reiterated that he favors keeping borrowing costs on hold but that Chair Jerome Powell and other colleagues don’t agree with him.
“There is time for us to wait and let our policy work,” Bostic said Thursday in Dublin. “I don’t see as much urgency to move as others, including my chair.”
Powell is signaling keenness to hike interest rates, having told a conference in Madrid just hours earlier that officials will probably need to raise at least twice more this year to bring inflation under control, and that that acting at consecutive policy meetings isn’t “off the table.”
Bostic, who is president of the Federal Reserve Bank of Atlanta, has emerged as one of the more dovish policymakers urging patience as officials confront high inflation. Most of his colleagues appear committed to continuing their most aggressive tightening campaign since the 1980s.
There are “lots of views on how muscular our policy should be moving forward,” Bostic said. “I have to convince my colleagues of my view.”
This month, Fed officials held rates steady earlier after 10 straight hikes, giving themselves more time to evaluate how the economy is responding to recent banking stress and higher borrowing costs.
In another speech in Ireland, Bostic said he thought the policy rate could be held steady because of signs inflation is easing and that the labor market is cooling some.
Business “contacts describe a labor market more like the one before the pandemic—still tight, but much less so than over the past few years,” Bostic said in remarks prepared for delivery at an event hosted by the Irish Association of Investment Managers.
“My staff and I find glimmers of hope in recent inflation reports,” he added, citing improvement in services prices. “I see an emergent and promising trend, a green shoot of hope, in a category that accounts for more than half of the consumer market basket.”
Bostic also addressed prospects offered by artificial intelligence, saying that “AI holds a lot of promise” and that it “will allow certain things to happen much quicker.” He cautioned though that it has the possibility to make some job categories obsolete.
–With assistance from James Regan and Zoe Schneeweiss.
(Updates with comments from another speech starting in seventh paragraph.)
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