Atlanta Fed President and FOMC member, Raphael Bostic, said on Monday that the war in Ukraine had not changed his thinking about reducing the balance sheet, which could happen sooner and faster than last time, Reuters reported. In addition, according to the official, the reductions in the balance sheets will offer the guideline for the appropriate rate hikes.
On the economy, Bostic said he sees the inflation at 4.1% by the end of the year and does not predict a recession, while waiting for the GDP continues to grow at a rate of 2.8% in 2022. Inflation will return to 2.0% in 2024, he said, adding that he is comfortable with more aggressive rate hikes if the data says that is appropriate.
“My baseline,” he said, “is that we won’t need to push interest rates above the level considered neutral,” but he’s open to the idea if necessary. Bostic said earlier in the day that his estimate for the neutral interest rate is 2.25%.
Source: Fx Street
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