Fed Representative Statement Fuels Speculation of 100 Basis Point Interest Rate Increase

Fed's Raphael Bostic says the June CPI report is a "source of concern" and "everything is in play" to correct the problem. When pressed further asking if a whole percent increase in interest rate is possible, Fed representative Raphael Bostic said, "it (the fed's policy change) would mean everything."

Bostic even went as far as to say that they are comfortable pushing the economy into a recession, even if it means a collapsing job and equities market. 

When asked, he said, "price stability is a precondition for having a strong, robust, and sustainable labor market… If we don't have stable prices, people are going to start making different kinds of decisions that will not be sustainable."

When asked how they would correct this problem, he said, "all options are being considered." He continued, "I am not wedded to any specific course of action. I'll let the broad collected intelligence that we are gathering guide me in terms of what's appropriate… If the top-line number is driven by one or two factors that have outsized weight I might think of it differently than if it is broad-based."

Current research from the CME group shows nearly 80% odds of increasing interest rates by roughly a whole percentage point, following Bostic's statement.

He said, part of his ambiguity when it comes to policy speculation is due to his current traveling and not having the time to delve into the report's details.

Bostic and other Fed representatives have two more weeks to discuss, with the following official policy meeting scheduled for July 26-27.

Author: Garrett Meifert

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