Fed's Bostic says he is ready to 'move away' from large rate increases

Reuters reports that the Atlanta Federal Reserve President Raphael Bostic said on Saturday he is ready to "move away" from three-quarter-point rate hikes at the Fed's December meeting. He feels the Fed's target policy rate need rise no more than another percentage point to tackle inflation.

"If the economy proceeds as I expect, I believe that 75 to 100 basis points of additional tightening will be warranted," Bostic said in remarks prepared for delivery at the Southern Economic Association.

"I believe this level of the policy rate will be sufficient to rein in inflation over a reasonable time horizon."

Bostic also said that given the inflation surprises of the past year, it is possible the "landing rate" might be higher than he currently anticipates, and that he was going to be "flexible in my thinking about both the appropriate policy stance and the pacing."

But at some point, he said, the Fed would need to pause and "let the economic dynamics play out," given that it may take what he estimate as anywhere from 12 to 24 months for the impact of Fed rate increases to be "fully realized."

US Dollar update

Meanwhile, the US Dollar gained slightly on Friday and made its largest weekly gain in over a month. Investors eyed rising bond yields and continued to make bets on the US Federal Reserve's interest rate hiking path.

The greenback could be driven by the FOMC minutes this week which will shed light on the FOMC's deliberations regarding the expected downshift in the pace of rate increases.