Bostic: Fed Could Use Half-Point Rate Rises If Needed (FT)

The FT ran an interview with Atlanta Fed President Bostic over the weekend.

• What is key is that Bostic “stuck to his call for three quarter-point interest rate increases in 2022, with the first coming in March. But he said a more aggressive approach was possible if warranted by the economic data.”
• The FT noted that “this could mean rate rises at each of the seven remaining policy meetings in 2022, or even the possibility of the Fed increasing the federal funds rate by half a percentage point, double its typical amount and a tool it has not used in roughly two decades.” Bostic himself said that “every option is on the table for every meeting. If the data say that things have evolved in a way that a 50 basis point move is required or (would) be appropriate, then I’m going to lean into that . . . If moving in successive meetings makes sense, I’ll be comfortable with that. I do think that a view has emerged that we have some meetings that we really just dial it in and that there’s no ability of action at, and that’s just never been my mindset.”
• Bostic also rejected claims that the Fed would raise interest rates too aggressively, which would damage the economy: “I don’t think there’s going to be a lot of constraint on growth as we remove these emergency actions.”