The Fed could supersize a rate increase to half a percentage point if inflation remains stubbornly high, a leading US central bank official said.
Raphael Bostic, president of the Fed’s Atlanta branch, stuck to his call for three quarter-point interest rate increases in 2022, with the first coming in March, in an interview with the Financial Times. But he said a more aggressive approach was possible if warranted by the economic data.
That could mean rate rises at each of the seven remaining policy meetings in 2022, or even the possibility of the Fed increasing the federal funds rate by half a percentage point, double its typical amount and a tool it has not used in roughly two decades.