The Fed: Fed will try to avoid ‘deep, deep pain’ for U.S. economy, Bostic says

by | Sep 25, 2022 | Stock Market

The Federal Reserve is trying to engineer an economic slowdown to try to bring inflation under control, but will try to avoid a protracted recession, Atlanta Fed President Raphael Bostic said Sunday. “We need a slowdown. There’s no question about that. But I do think that we’re going to do all we can at the Federal Reserve to avoid deep, deep pain,” Bostic said, during an interview on CBS News’ “Face the Nation.”

Last week, the Fed hiked its benchmark interest rate by a supersized 0.75 percentage points — the third straight rate hike of that magnitude. That brought the fed funds rate up to a range of 3%-3.25%. Fed officials also penciled in more large moves this year, which would bring the rate up to 4.4%. Economists worry that going so fast might “break” the economy and cause a recession. But Fed officials think the economy can slow and still avoid a severe recession. This is called a “soft landing.” Bostic said he was optimistic about the economy because the labor market is creating l …

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