May 20, 2024 11:51 GMT
Bostic - Steady State Rates Could Be Similar To 1990s or 2000s
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Bostic ('24 voter) in an interview with Bloomberg TV said nothing has changed since he last spoke [he’s previously indicated looking at one cut late this year. The issue is when we’re going to be certain that inflation is on a path to 2%.
- I think our new steady state [for interest rates] is going to be higher than people have known over the past decade, maybe back to where it was in the 1990s and 2000s. Going back to zero means that something bad happened in the economy
- On the employment side, we’re still seeing many many jobs being created. On the inflation side and stable prices, we’ve still got a ways to go.
- We are open to all possibilities from here moving forward. My outlook scenario is slow and steady wins the race. There are many policy prescriptions for all these scenarios and we have to be ready for them.
- Hearing from business leaders that today, labor markets are softer than twelve months ago but they aren’t soft. It’s really important when thinking about the labor market is that before the pandemic labor markets were tight. Immigration has been an important contributor and we’ll see how it evolves moving forward.
- Everyone acknowledges to me that our policy rate is slowing things down, it is tightening, and that’s what really gives me confidence that we can get inflation back to our 2% target.
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