Federal Reserve Bank of Atlanta President Raphael Bostic said the US economy faces a period of some disruption as debts are refinanced at significantly higher interest rates, putting some pressure on both financial institutions and the government.

“We have a lot of existing debt out there that is at very low prices,” Bostic said at the South African Reserve Bank’s Biennial Research Conference in Cape Town. “When that comes due, they’re not going to be able to refinance into comparable prices. There’s going to be an adjustment that needs to happen on that. So I actually think there’s a shaking out that’s about to happen at all levels.”

Bostic, who doesn’t vote on monetary policy this year, has been among the more dovish of US policymakers. On Thursday, he urged that policymakers be cautious and patient because too much tightening risks unnecessary pain for the economy.

After aggressive rate increases in 2022, Fed Chair Jerome Powell and his colleagues have slowed the pace this year, and signaled they may be close to wrapping up.

“So many bankers in our country have never lived in a rising interest rate environment or a higher interest rate environment.” Bostic said Friday. “And so there’s a lot of learning that needs to take place.”

And for government debt, “the amount of interest that’s going to have to be paid on that debt is going up considerably. So there’s pressure that’s going to happen in all of these areas.”

The US’s long-term neutral interest rate, sometimes referred to as R-star, may rise because of businesses boosting productivity during and after the Covid-19 pandemic, Bostic said in response to audience questions.

“Many businesses that have been contemplating introducing technologies started to do it,” he said. “So I was at a restaurant like two weeks ago and a robot brought me my food. And I had never seen this before. This is a way that businesses are trying to increase their productivity while providing services.”

Officials raised their benchmark rate in July to a range of 5.25% to 5.5%, a 22-year high, and their most recent projections had one more rate increase penciled in this year. Markets currently expect officials to hold rates steady at their Sept. 19-20 meeting.

At the Kansas City Fed’s conference at Jackson Hole, Wyoming, last week, Powell said that inflation remained too high and central bankers were prepared to do more if needed, and “intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective,” he said.

This article was provided by Bloomberg News.