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Atlanta Fed President Raphael Bostic said on Tuesday that the economy should be optimistic and said he is confident that the central bank should continue its interest rate hikes in order to to continue the expansion.
"Unless the data dissipates me, I consider that a continuous and gradual removal of political developments is appropriate until we reach a neutral rate," Bostic said in the text of the statement. 39, a speech delivered at Baton Rouge, La.
While it is difficult to accurately estimate the point at which monetary policy is becoming neutral, Mr Bostic said: "we still have some rate hikes" and, for the moment, monetary policy continues to support the economy.
Mr. Bostic is currently a voting member of the Federal Open Market Committee, responsible for setting rates. The agency has raised rates three times this year and raised its target for the overnight rate between 2% and 2.25%. While market turmoil in recent days has prompted some to question the outlook, the Fed should still raise rates at the end of the year and continue to raise them next year.
Fed officials are actively questioning whether they should get neutral rates or beyond, even though several officials said it was very difficult to gauge the impact of economic policy on the economy. Mr. Bostic seems to be in the old camp.
President Trump has placed the Federal Reserve at the heart of the latest market downturn, saying the "Fed has gone crazy." WSJ Global Economics Editor Jon Hilsenrath explores three reasons the Fed is raising interest rates. Photo: Getty Images.
Once the Fed is neutral and "our policy will be ineffective, but we will not stop, I will check if consumers and businesses continue to act in such a way as not to suggest an accumulation of excess," said Mr Bostic. . "If this continues, it will give me confidence that the economy is on a sustainable path," he said.
Mr Bostic also spoke to those who believe that it is useful to make the economy work as much as possible so that the benefits of expansion benefit all groups. He said the key is to ensure that all gains are sustainable, and that's what decision makers should focus on.
The official said that "economic growth is on a solid trajectory" and added: "it is based on solid foundations and has not been significantly pushed higher or lower". He also said: "I think the risks are on the upside."
Bostic said companies have "resisted" the recent trade and tariff tensions.
The official warned of price pressures as companies warned him of "a change in their cost structure", but it remains that "inflation remains stable and is around around the world. target of 2% set by the FOMC, "he said.
Bostic also said that, given the strength of growth data this year, he may be preparing to reinforce his estimate of what the economy can offer in a sustainable manner, adding that he believes that this is the only way to improve the economy. it is now proven that "the economy is moving up a gear". its growth estimates for this year and the following year.
Write to Michael S. Derby at [email protected]
Write to Michael S. Derby at [email protected]
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