Bostic: Economy may respond quickly to Fed rate increases

ATLANTA, Ga – The quick response in financial markets to tighter monetary policy offers hope that other parts of the economy may adjust more quickly as well, Atlanta Federal Reserve President Raphael Bostic said on Monday.

“That opens up some possibility that parts of the economy respond faster,” to higher interest rates, and in turn helps curb demand and inflation, Bostic said.

“We have to keep our eyes open…This is really a two sided issue” in which the Fed needs to be read to either speed or slow the pace of rate increases depending on how the economy reacts.

(Reporting by Howard Schneider; Editing by Chris Reese)