Federal Reserve official Raphael Bostic reiterated that he favors keeping borrowing costs on hold but that Chair Jerome Powell and other colleagues don’t agree with him.
“There is time for us to wait and let our policy work,” Bostic said Thursday in Dublin. “I don’t see as much urgency to move as others, including my chair.”
Powell is signaling keenness to hike interest rates, having told a conference in Madrid just hours earlier that officials will probably need to raise at least twice more this year to bring inflation under control, and that acting at consecutive policy meetings isn’t “off the table.”
Bostic, who is president of the Federal Reserve Bank of Atlanta, has emerged as one of the more dovish policymakers urging patience as officials confront high inflation. Most of his colleagues appear committed to continuing their most aggressive tightening campaign since the 1980s.
There are “lots of views on how muscular our policy should be moving forward,” Bostic said. “I have to convince my colleagues of my view.”
This month, Fed officials held rates steady earlier after 10 straight hikes, giving themselves more time to evaluate how the economy is responding to recent banking stress and higher borrowing costs.
Bostic highlighted that the Fed’s slowing of hikes has been purposeful — as policymakers “want to minimise amount of pain associated with us getting inflation back to target.”
Yet, the closer you get to the ideal rates, the more you have to “probe” to make sure you don’t overshoot, he said.
“Every percentage point of overshooting means we lose jobs we mightn’t have needed to lose,” Bostic added. “In a phase now where it’s not unreasonable to expect that the pace of change will slow.”
The Atlanta Fed chief also was quizzed on artificial intelligence, which he said “holds a lot of promise” and will “allow certain things to happen much quicker.” He cautioned though that it has the possibility to make some job categories obsolete.
--With assistance from James Regan.
This article was provided by Bloomberg News.