MNI: Fed's Bostic Would Like Rates At 4.25%-4.5% By Yearend

Atlanta Fed President Raphael Bostic said Wednesday he would like interest rates in the 4.25%-4.5% range by yearend and then would like to see how the economy plays out from there, adding that inflation has been stubbornly high.

"Inflation is still high and too high and it is not moving enough speed back down to our 2% target and that's driven really by the continuing imbalance between the demand and supply to meet it," he told reporters on a call after speaking at a banking event. "It's caused me to really adjust my policy thinking. I had originally thought that we would need to really just mildly restrict this policy stance."

"Lack of progress thus far has me thinking much more now that we have to get to a moderately restrictive stance. And for me, that is in the 4.25% to 4.5% range for our policy. My preference is that we'd get there by yearend and then see where things stand," he said.

Bostic said his baseline right now is for another 75 basis point hike in November and another 50 in December.

"But we're still weeks out so I'm just gonna have that as sort of a starting point and then let the data and the reality take me where they will," he said, projecting unemployment to rise to roughly 4.1%. "I'm hopeful that the economy starts to respond in ways that these imbalances start to resolve so that the faster that happens the less we'll have to do."

"We've got a lot of geopolitical uncertainty more broadly and so we're definitely going to have to be mindful of those things," Bostic said, adding he hasn't seen any evidence of dysfunction in the Treasury market that might require a response.

Atlanta Fed research director David Altig told MNI Friday U.S. inflation pressures seem stuck at high levels despite the Fed's aggressive monetary tightening so far. Boston Fed President Susan Collins said Monday recent data suggest inflation may have peaked recently, while adding she still sees the need to expeditiously raise interest rates and continue the central bank's QT program.