Fed's Bostic sees 6 rate hikes this year

Atlanta Federal Reserve Bank Governor Raphael Bostic said that he has drawn a total of six interest rate hikes this year and two for 2023 because he was concerned about the impact of Russia's invasion of Ukraine on the US economy.

He further added, “ The elevated levels of uncertainty are front forward in my mind and have tempered my confidence that an extremely aggressive rate path is appropriate today.”

"Managing high inflation is my number one concern," Bostic said in a remark prepared for submission to the National Association for Business Economics, noticing a serious imbalance in labour supply and demand and said that it's also important to deal with these problems.

Last week, the Fed raised interest rates with its first rate hike since 2018, curbing inflation from near zero. This is now above the central bank's target of 6%. With Fed policymakers expecting to see rate riding to at least 1.9% by the end of the year, a pace equivalent to a quarter-point increase at the six remaining Fed meetings of each year, with four more expected to happen next year.

Mr Bostic said on Monday that the job market is tight and it is "critical" to rebalance labour supply and demand. He said the conflict in Ukraine will continue to push up prices for commodities such as oil and wheat, but more generally, as companies rebuild their supply chains.

Bostic's comments came at the start of the conference just hours before Federal Reserve Chair Jerome Powell was due to speak, giving investors new clues about possible interest rate paths.