© Archyde.com A member of the US Federal Reserve proposes to suspend interest rates at this date!
Arabictrader.com – Atlanta Fed member Rafael Bostick said yesterday evening that his suggestion on the Fed’s suspension of the September meeting should not be interpreted as the Fed’s vision, as rescuing market conditions is not a priority for the Fed.
Bostick reiterated his call to suspend interest rate hikes by the US Federal Reserve in September, as this would be the most logical approach to speeding up the market’s recovery, following he first suggested the matter last week.
Bostick believed that a pause in the rate hike may be the best thing at the moment, given that the market response to the US Federal Reserve’s shift to raising lending rates was much stronger than what markets have seen historically.
With most Fed members favoring a 50bp rate hike at the next two MPC meetings in June and July, Bostick sees this as increasing the likelihood that the broader economy will respond to a hike.
He noted that by September the degree of uncertainty regarding the economy would be reduced and labor market imbalances might recede, leading to a very large drop in inflation.
But he also noted that, on the other hand, inflation remains likely to remain high in light of the crisis of supply chains disrupted by external events such as Russia’s war once morest Ukraine and the shutdowns in China.
Although there are no warning signs of economic contraction yet with a lot of momentum in the economy, it is possible that the economy will slow down for some time before sliding into more recession.