Fed's Bostic: Reiterates that he expects three 25bps rate hikes in 2022

Federal Reserve Bank of Atlanta President Raphael Bostic on Monday told Yahoo Finance that he expects three rate hikes in 2022, in a reiteration of remarks made over the weekend. He clarified that a 50bps move in March was not the Fed's preferred policy action and that the Fed is not fixed on a set policy progression. Bostic continued that he is "laser-focused" on the Fed's next meeting and how data on inflation and jobs are evolving, before saying that, at this point, it is hard to anticipate too much what the "long arc" of policy will be. 

Bostic continued that he had penciled in 3.0% inflation for the full year 2022, adding that he anticipates labour and supply-side disruptions to ease. If inflation responds more quickly, the Fed could go slower, he added, though noting that this is not his base case assumption give that businesses appear to have built in price increases already. Regarding the coming official US jobs report, Bostic said he expects the headline number to be a little lower than recent months to reflect the influence of Omicron, before saying that he is hopeful that job growth will rebound in February and March. 

Market Reaction

FX markets do not seem to have paid much attention to the latest remarks from Fed's Bostic.