Nov 26 (Reuters) - Atlanta Federal Reserve President Raphael
Bostic said on Friday he is hopeful that the momentum of the
U.S. economy will carry it through the next wave of the
coronavirus pandemic, and said he remains open to accelerating
the pace of the central bank's bond taper.
Earlier on Friday, the World Health Organization said it was
designating the new Omicron variant, first identified in South
Africa, as being "of concern."
If the new Omicron coronavirus variant follows the pattern
seen with previous variants, it should cause less of an economic
slowdown than the Delta variant, Bostic said.
"We have a lot of momentum in the economy right now," Bostic
said during an interview with Fox News, citing strong jobs
growth. "And that momentum, I'm hopeful, will be able to carry
us through this next wave, however it turns out."
Bostic reiterated that he is open to https://www.bloomberg.com/news/articles/2021-11-23/bostic-says-faster-taper-would-give-fed-option-for-earlier-hikes
speeding up the pace at which the central bank slows down its
asset purchases so officials can have greater flexibility to
respond to surging inflation.
It could be "reasonable," Bostic said, for the Fed to
potentially conclude its asset purchases by the end of the first
quarter next year, or early in the second quarter, if the
economy continues on the same trajectory. At the current pace,
Fed officials would be done tapering purchases by the middle of
next year. Policymakers will meet again on Dec. 14-15.
The news of the Omicron variant spurred investors to lower
their expectations https://www.reuters.com/markets/europe/new-covid-scare-sparks-rate-rethink-markets-2021-11-26
on Friday for how quickly the Fed and other central banks may
raise interest rates next year.
According to CME's FedWatch tool, money market traders were
pricing in a 53.7% chance of at least one rate hike by the
Federal Open Market Committee's June meeting as of Friday
afternoon, down from an 82.1% chance on Wednesday.
Bostic said on Friday that he has not ruled out any possible
actions and said it is "certainly possible" for the Fed to raise
interest rates at least twice next year if inflation remains
"We're not going to let inflation get out of control,"
(Reporting by Jonnelle Marte; Additional reporting by Lucia
Mutikani; Editing by Leslie Adler)