Monetary policy

Federal Reserve Bank of Atlanta President Raphael Bostic said “everything is in play” for policy action after data showed that U.S. inflation accelerated again to a fresh four-decade high last month.

The Federal Reserve has aggressively ratcheted up interest rates to tame inflation. But that swift turnaround after more than a decade of accommodative monetary policy could create new risks to the financial system.

“I am one of the guys who like the option value of deciding the week of the meeting as opposed to two weeks before the meeting,” he told reporters Tuesday.

Federal Reserve Bank of Atlanta President Raphael Bostic said the U.S. economy can cope with higher interest rates and repeated his support for another jumbo move when the central bank meets later this month.

Federal Reserve Bank of Kansas City President Esther George, who dissented last month against the central bank’s jumbo 75 basis-point increase in interest rates, cautioned that rushing to tighten policy could backfire.

Federal Reserve Governor Christopher Waller said he supports raising interest rates by 75 basis points this month for a second straight meeting and “probably” a 50 basis-point hike at the following gathering in September.

Federal Reserve officials agreed last month that interest rates may need to keep rising for longer to prevent higher inflation from becoming entrenched, even if that slowed the U.S. economy.

Signs of a rapidly deteriorating U.S. economic outlook have spurred bond traders to pencil in a complete policy turnaround by the Federal Reserve in the coming year, with interest-rate cuts in the middle of 2023.

Susan Collins officially took office Friday as the president of the Federal Reserve Bank of Boston, making history in becoming the first Black woman to lead a regional Fed bank.

Federal Reserve Chair Jerome Powell said the U.S. economy is in “strong shape” and the central bank can reduce inflation to 2% while maintaining a solid labor market.