Federal Reserve Bank of Atlanta president Raphael Bostic issued a statement Monday that he supports action for six rate hikes this year and twice in 2023. Yet the frequency he cites is less than other policymakers because of concerns over the impact on economy following the Russian invasion of Ukraine.
He called for that it was important to address the significant imbalance between labor supply and demand. The Fed last week raised interest rates in its first quarter percentage rate hike since 2018 as a measure to tackle inflation which has now exceeded 6%.
Most Fed policymakers saw interest rates rise to at least 1.9% by the end of the year, a rate equivalent to a quarterly increase at the remaining six Fed meetings this year.
Bostic said on Monday the job market was in a tight state and it was important to restore balance to labor supply and demand. But he added that he believes the current high wage growth, which as a whole is still below inflation, reflects employers trying to help workers from falling behind in wages.
The head of the Atlanta Fed said the conflict in Ukraine would put pressure on commodity prices such as oil and wheat but also affect the supply chain. Both of these conditions are likely to exacerbate already intense inflationary pressures; On the other hand, the risk of “walking in both directions,” with uncertainty contributed by conflict is likely to dampen economic activity, he said.
Investors will be watching closely for new indications of possible rate hikes in the future.
