• Federal Reserve Bank of Atlanta President Raphael Bostic said January’s strong jobs report raises the possibility that the central bank will need to increase interest rates to a higher peak than policymakers had previously expected.
• If a stronger-than-expected economy persists, “It’ll probably mean we have to do a little more work,” Bostic told Bloomberg News in a phone interview on Monday. “And I would expect that that would translate into us raising interest rates more than I have projected right now.”
• Bostic reiterated that his base case remains for rates to reach 5.1%, in line with the median of policymakers’ December forecasts, and stay there throughout 2024. A higher peak could come through an additional quarter-point hike beyond the two currently envisioned, he said, while not ruling out a half-point increase.