Bostic Reinforces "Higher For Longer" Rates Theme Ahead Of Jackson Hole

Today's published WSJ interview is the first time we've heard from Atlanta Fed Pres Bostic since the July jobs and CPI data reports. He's not a current FOMC voter, but he told the WSJ "he hasn't decided" whether the Fed should hike by 50bp or 75bp in September - "at this point, I'd toss a coin between the two".

• He noted the key payrolls and CPI data between now and then, which in the event of payrolls and inflation strength "may make a case for, you know, another 75 basis point move."
• The WSJ reports he is looking for another 125bp hikes this year to a 3.50-3.75% end-2022 rate, which would see the "tightening campaign completed", and sees neutral at 3%.
• And he not only thinks the Fed should "really stay there" at a higher level of rates "to purposely analyze and assess how our policies are flowing through the economy", he is described by the WSJ as warning "swift rate cuts could even be counterproductive to the effort to lower inflation given the negative impact that level of monetary policy uncertainty might have on the economy".
• He's described as "upbeat" on the economic outlook but points out on growth going forward: "some weakening is to be expected...it's going to be really important that we resist the temptation to be too reactionary" on renewing accommodation. Again, that points to a "higher for longer" rate scenario.
• On the other hand, he sounds increasingly concerned about global risks impacting the US: "those factors [Russia-Ukraine, China] could actually accelerate our domestic slowdown in ways that also mean that we have to do less" tightening.