Bostic: Fed should avoid 'prematurely'
declaring win in jobs battle
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[June 23, 2021] WASHINGTON
(Reuters) -A spell of high inflation in the U.S. could last as long as 9
months, but the central bank should still avoid declaring victory too
soon in the battle to regain 7.5 million jobs lost during the pandemic,
Atlanta Federal Reserve president Raphael Bostic said on Wednesday. |
![](../images/062321PIX/2021-06-23T113226Z_2_LYNXNPEH5M0JI_RTROPTP_4_USA-FED-BOSTIC_small.JPG)
Federal Reserve Bank of Atlanta President Raphael Bostic participates in
a panel discussion at the American Economic Association/Allied Social
Science Association (ASSA) 2019 meeting in Atlanta, Georgia, U.S.,
January 4, 2019. REUTERS/Christopher Aluka Berry |
The
recent jump in prices will prove temporary, Bostic said, but
"temporary is going to be a little longer than we expected
initially...Rather than it being two to three months it may be
six to nine months," Bostic said in an interview with National
Public Radio's Morning Edition.
But Bostic said the Fed should nevertheless keep in view the 7.5
million lost jobs when it assesses where the U.S. recovery
stands. Some policymakers think that retirements and other
individual decisions may make it hard to return to the
pre-pandemic level of employment.
"That is a benchmark we all need to keep our eye on," Bostic
said. "We have to make sure our policies don't pivot in ways
that make it look like we are declaring victory prematurely."
The Fed at its last policy meeting indicated it may be preparing
to raise interest rates sooner than expected because of recent
inflation readings that have pushed measures like the consumer
price index to multi-year highs.
Bostic was not asked and did not volunteer his view about when
the Fed's target policy interest rate might need to increase
from its current near zero level, or when the Fed should begin
reducing its $120 billion in monthly bond purchases.
(Reporting by Howard Schneider; Editing by Toby Chopra and Chizu
Nomiyama)
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