MNI: Fed's Bostic Sees 6 Hikes In 2022, 2 In 2023

Atlanta Federal Reserve President Raphael Bostic Monday said the outlook for inflation has moved up significantly and were it not for added uncertainty from the war in Ukraine he would have increased his rate outlook beyond his current view of a total of eight hikes in 2022 and 2023.

"In the latest SEP, I penciled in six rate hikes for 2022 and two more for 2023," he said, adding he's upped his projections from three rate increases late last year.

"I recognize that I am toward the bottom of the distribution relative to my colleagues, but the elevated levels of uncertainty are front forward in my mind and have tempered my confidence that an extremely aggressive rate path is appropriate today," said Bostic in a prepared speech to the National Association for Business Economics Annual Policy Conference in Washington.

The Fed's Summary of Economic Projections released last week showed the median FOMC participant anticipating 7 rate hikes this year.

"Here the risks go both ways. Should demand falter in the face of economic uncertainty or removal of monetary policy accommodation, then the appropriate path may be shallower than I currently project," he said. "But there are other developments, such as shifts in supply strategies, that could mean higher costs and thus motivate a steeper policy path than I expect."

Structural economic forces emanating from the Ukraine conflict appear to be adding upward pressure to costs, said Bostic, a 2024 FOMC voter.

"Obviously, the baseline for inflation has moved up significantly. My original outlook was that inflation would likely begin decelerating this spring. That almost certainly won’t happen now. Let me say clearly that getting the high rates of inflation under control is the top concern for me for 2022."