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REPEAT:MNI POLICY: Fed's Bostic: Reevaluate Stance at Neutral

Repeats Story Initially Transmitted at 17:30 GMT Oct 23/13:30 EST Oct 23
--Bostic: 'Still A Few Rate Hikes Away" From Neutral
By Jean Yung
     WASHINGTON (MNI) - Federal Reserve Bank of Atlanta President Raphael Bostic
on Tuesday called for gradual increases in interest rates until policy reaches a
neutral setting, which he judges to be "a few rate hikes away." At that point,
he said he would reevaluate the appropriate stance of policy. 
     "We ought to shift into neutral," he said in remarks prepared for a
business roundtable in Baton Rouge, Louisiana. "While there is some uncertainty
surrounding estimates of neutral, as evidenced by the latest Summary of Economic
Projections from the FOMC, my assessment is that we are still a few rate hikes
away." 
     At that point, he continued, "I will look to see if consumers and
businesses continue to act in ways that do not suggest a buildup of excesses. If
that continues, it will give me confidence that the economy is on a sustainable
path." 
     Bostic voted for the past three rate hikes this year and said nothing to
suggest he would veto another widely anticipated increase in December. 
     He sees risks as "tilted to the upside," he said, as the fiscal stimulus
has pushed growth well above its potential. However, tariffs and trade tensions
pose headwinds for the economy, he added. 
     Bostic also explored the argument that running a so-called "high-pressure
economy" can help draw disadvantaged workers back to the labor market but said
it's unclear whether these benefits are lasting. 
--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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