MNI BRIEF: ​Fed's Bostic Says Bar Higher For Further Hikes

Federal Reserve Bank of Atlanta President Raphael Bostic said Wednesday he supports holding the fed funds rate at the current 5%-5.25% target range and letting past rate increases work their way through the economy, adding the bar to justify further rate hikes is higher than it was a few months ago.

"I think we are in a place where we should let the hard work the Committee has already done work its way through the economy and see if it continues to bring inflation closer to our goal," Bostic said in his most recent Message from the President. "We have good reasons to expect our policy tightening will be increasingly effective in coming months, which would accelerate progress to that end." (See: MNI INTERVIEW: Inflation Drop Warrants Fed Pause - Ex IMF Econ)

The Atlanta Fed chief said monetary policy has been restrictive for only eight to nine months and the real economic effects of tighter monetary policy are only just beginning to take hold. The first 325 to 350 basis points of increases removed accommodation and the subsequent 150 to 175 basis points have moved policy into what "may now be sufficiently restrictive," Bostic said.