Fed's Bostic (non-voter): Ready to move away from 75 bps hikes; Believe another 75 to 100 bps of tightening will be sufficient to rein in inflation over a reasonable time horizon (implies peak rate between 4.75-5.00%)
- Given the inflation surprises of the last year, the landing rate could be higher than I anticipate, will have to be "flexible in my thinking about both the appropriate policy stance and the pacing."
- Fed will need to pause and "let the economic dynamics play out" at some point.
- Estimates it will take 12 to 24 months for the impact of Fed rate increases to be "fully realized."
- "Being more cautious as policy moves deeper into restrictive territory seems prudent," even if it turns out that rates have to be raised again later on.
- "We want the public and markets to clearly understand our aims, and the fact that we are going to be unwavering in the pursuit to bring underlying inflation back toward our 2% objective." Fed must not be tempted to cut rates before inflation is well on track to decline to the 2% target, even if the economy weakens appreciably.