The Federal Reserve could choose to raise its benchmark interest rate by 50 basis points if a stronger approach is needed to curb inflation, Raphael Bostic, president of the Fed’s Atlanta branch, said in an interview with the Federal Reserve. Financial Times.
Bostic stuck to his prediction that three quarter-point hikes from March would be the most likely scenario, although stubbornly high consumer prices could justify a stronger rate hike. The Fed typically raises rates in quarter-point increments.
“All options are on the table at every meeting,” Bostic said Friday. “If the data says that things have evolved in such a way that a 50 basis point move is necessary or appropriate, then I will lean towards that…” he told the paper.
Bostic added that he will look at whether wage increases are driving prices significantly, though he expects wage growth to moderate in coming months.
Fed Chairman Jerome Powell said last week that policymakers are ready to raise rates in March.
The vast majority of economists forecast the Fed will make a quarter point move in March, although Nomura forecasts a 50 basis point hike, citing Powell’s words. A 50-point move would be the first since 2000.