The president of the Atlanta Federal Reserve Bank said U.S. interest rates might have to rise a bit higher than he expected in order to subdue inflation in the wake of a stunningly strong jobs report in January.
Raphael Bostic said in an interview with Bloomberg on Monday that a robust labor market probably means “we have to do a little more work.”
“And I would expect that that would translate into us raising interest rates more than I have projected right now,” he said.
Bostic is not a voting member this year of the Fed panel that sets U.S. interest rates. Another bank president, Mary Daly of the San Francisco Fed, took a wait-and-see approach in an interview on Friday.
Fed Chair Jerome Powell is expected to comment on the jobs report on Tuesday in an interview at the Economic Club of Washington, D.C.
The Fed raised interest rates again last week as part of a stepped-up fight to reduce inflation to prepandemic levels of 2% or less. The rate of inflation was running at a 6.5% pace at the end of 2022, based on the consumer price index.
A key short-term rate controlled by the Fed was lifted to a top end of 4.75% and is likely to go to a range of 5% to 5.25% before the central bank considers a pause to judge the effects of its strategy on the economy.
Many analysts think a recession is likely this year.