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“The data that came in the last several months really pointed to
a need for us to get closer to that neutral stance faster,”
Bostic said in comments to reporters, noting that the current
federal funds rate, set in a range of between 1.5% and 1.75%, is
still in his view "accommodative" and encouraging economic
activity.
Following the expected increase at the July meeting, "we will
have to see how the economy evolves. ... I am not putting too
much weight on probabilities for what we will do two, three,
four meetings from now."
Bostic in late May said he wanted to avoid "recklessness" in
raising interest rates and supported sticking with the
half-point rate increases that Fed officials seemed to broadly
back at that point.
But when data showed inflation jumped in May, foiling hopes it
had reached a peak, Bostic supported a larger
three-quarter-point increase at the Fed's June meeting, and has
now backed another at the session upcoming on July 27-28.
Bostic said he was "comfortable" the U.S. economy is strong
enough to weather another large rate increase, and pointed to
continued strong job gains even as higher interest rates begin
to cool parts of the economy like housing.
The current situation "does not feel like a recession," Bostic
said.
Actions beyond the Fed's July meeting, however, will depend on
how the economy evolves.
"If demand comes down much faster than we expected or supply
comes back, I will be comfortable pulling off" further rate
increases, Bostic said.
Inflation data to be released on Wednesday is expected to show
consumer prices continued rising in June at a more than 8%
annual rate, but "what I am looking for ... is signs that the
month-to-month shift is narrowing in terms of the pace," Bostic
said.
(Reporting by Howard Schneider; editing by Jonathan Oatis)
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