Atlanta Fed President Confident US Economy to Remain Protected From Coronavirus Impact
Atlanta Fed president Raphael Bostic has expressed belief in the US central bank's stance to keep rates on hold, despite the coronavirus
Monetary policy member and Atlanta Fed president Raphael Bostic has expressed belief in the US central bank’s stance to keep rates on hold, despite the coronavirus outbreak increasing market expectations for a rate cut soon. For now, Bostic appears confident that the three rate cuts from 2019 has offered a comfortable amount of stimulus to support US economic growth and keep it resilient to external risks such as the economic fallout of the outbreak.
Bostic made these comments in a recent interview at the sidelines of a conference, stating, “If this becomes a world issue, with ripples through many countries and many economies, then that’s different type of event than as I understand it to be today. But given our past recent experience with these sorts of things, I don’t think it should; it hasn’t changed my outlook or my expectation about our rates path.”
In the most recent Fed meeting held last week, Chairman Jerome Powell held interest rates and monetary policy unchanged but did comment on the coronavirus. He stated that the outbreak could slow down China’s economy but it was too soon to tell if it would make an impact on economic growth in the US. Markets, however, began expecting the Fed to cut interest rates in the near future to protect the US economy.
Bostic also expressed confidence that inflation is close to Fed’s 2% target, although it remains slightly weaker than expected. However, he maintained that the Fed could consider changing its approach to gauging inflation and possibly explore new ways to improve inflation in the US.
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