Fed rate hike could be half-point if needed, says Raphael Bostic – FT

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FILE PHOTO: Federal Reserve Bank of Atlanta President Raphael Bostic participates in a panel discussion in Atlanta

– The Federal Reserve could supersize an interest rate increase to half a percentage point if inflation remains stubbornly high, Atlanta Fed President Raphael Bostic told the Financial Times in an interview.

Bostic stuck to his call for three quarter-point interest rate increases in 2022, with the first in March, but a more aggressive approach was possible if warranted by economic data, he told the newspaper on Friday.

“Every option is on the table for every meeting,” Bostic told FT. “If the data say that things have evolved in a way that a 50 basis point move is required or [would] be appropriate, then I’m going to lean into that . . . . If moving in successive meetings makes sense, I’ll be comfortable with that.”

The Fed clearly telegraphed a March interest rate hike after its meeting last week. Fed funds futures, which track short-term rate expectations, are pricing nearly five rate increases of 25 basis points each this year, up from four expected hikes before that.

(Reporting by Juby Babu in Bengaluru; Editing by Richard Chang)

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