Fed hopes economy is on cusp of inflation slowdown as rate hikes loom

WASHINGTON, Feb 9 (Reuters) – The U.S. economy may be nearing a turn lower in inflation, Atlanta Fed President Raphael Bostic said on Wednesday, though he added he is still leaning towards a slightly faster pace of interest rate increases this year.

“I am very hopeful we are going to start to see that decline … There is some evidence we are on the cusp of that,” Bostic said in an interview with CNBC.

While Bostic still expects three quarter-percentage-point rate increases will be appropriate this year, he said: “I am leaning a little towards four. We are going to have to see how the economy responds as we take our first steps,” with an initial rate increase expected in March.

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New inflation data on Thursday is forecast to show the consumer price index continued to rise at an annualized pace of more than 7% in January – a level reminiscent of the inflation shocks of the 1970s and 1980s. That has…

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