Fed's Bostic: Fed has to be cautious about first rate move
|Atlanta Federal Reserve President Raphael Bostic said on Tuesday that the restrictive monetary policy is having an impact on rate-sensitive sectors and delaying investment, per Reuters.
Fed policymakers take on a cautious language on policy outlook.
Key takeaways
"Businesses are confident in underlying strength of the economy; next year or two should see continued solid performance."
"The efficacy of monetary policy may be weaker than in the past, but that doesn't mean it is having no impact at all."
"The Fed's highest priority is to get inflation back to 2%."
"Expecting inflation to decline but relatively slowly, would not expect a rate cut before the fourth quarter."
"No longer hearing about difficulties in supply chains; hope is that goods deflation continues."
"The upcoming framework review will be robust, given the number of open questions about the economy and policy."
"Though businesses are confident about the economy, they don't feel they have the same pricing power as even 6 months ago."
"Fed has to be cautious about the first rate move, may need to be later in order to not stoke pent-up exuberance for investment, other spending."
"Would rather wait longer for a rate cut to be sure inflation does not start to bounce around."
"Not in a hurry to cut rates; want to make sure that policy easing is unambiguous."
Market reaction
The US Dollar Index edged slightly higher following these comments and was last seen rising 0.1% on the day at 104.68.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.