FILE PHOTO: President and Chief Executive Officer of the Federal Reserve Bank of Atlanta Raphael W. Bostic speaks at a European Financial Forum event in Dublin, Ireland February 13, 2019. REUTERS/Clodagh Kilcoyne/File Photo
December 2, 2021
By Ann Saphir and Lindsay Dunsmuir
(Reuters) -Federal Reserve Bank of Atlanta President Raphael Bostic told the Reuters Next conference on Thursday it would be appropriate to end the central bank’s bond-buying program by the end of March to allow the Fed the option to raise rates to deal with inflation.
The Fed, which began tapering its bond-buying last month on a pace that would end the program entirely by June, is set to consider compressing that timeline when policymakers next meet on Dec. 14-15.
With robust growth, the job market improving and inflation running more than twice the Fed’s 2% target, “I think having this finished some time before the end of the first quarter would be in our interest,” Bostic said.
And if inflation continues to run as high as 4% through next year, as some forecasters project, “there’s going to be a good case to be made that we should be pulling forward more interest rate increases and perhaps even do more than the one I’ve penciled in.”
If data should, by contrast, come in softer than expected, the Fed would adjust accordingly, he said.
Once the Fed starts lifting rates, he said, it will likely move at a “slow and steady” pace, though if inflation does not recede as expected over the next year or two it may need to “take more strident steps” to rein it in.
To watch the Reuters Next conference please register here https://reutersevents.com/events/next/
(Reporting by Ann Saphir, Lindsay Dunsmuir and Dan Burns; Editing by Chizu Nomyama)