While appearing on CBS’s “Face The Nation” on Sunday, Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, reaffirmed the Fed’s commitment to reaching a 2% inflation rate.
What Happened: Bostic reiterated the messaging from Fed Chair Jerome Powell, and stated that “inflation is high, it is too high, and we need to do all we can to make it come down.” His comments come after the Fed on Wednesday raised its benchmark rate by 0.75% for the third straight time and indicated that it will continue to hike well above the current level.
Bostic pointed to the resilient labor market as being among the factors that will allow “the economy to absorb our actions and slow in a relatively orderly way.”
Bostic maintained that history shows “there is a really good chance that if we have job losses, it will be smaller than what we’ve seen in other situations.”
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He acknowledged that there will be difficulties ahead for U.S. investors and workers. “I do think that we’re going to do all that we can at the Federal Reserve to avoid deep, deep pain,” Bostic said.
The Fed has been facing criticism for relying on lagging indicators to make their monetary-tightening decisions. One economist who was especially vocal about his concerns was Wharton Professor of Finance Jeremy Siegel, who called Fed officials “real tough guys” who won’t stop raising rates until they “crush the economy.”
Those sentiments were echoed by Tesla CEO Elon Musk, who responded with a tweet saying “Siegel is obviously correct.”
Photo: Courtesy of Center for American Progress on flicker
