A leading U.S. central bank official said the Fed could extend interest rate hikes to half a percentage point if inflation remains high.

In an interview with the Financial Times, the Fed’s Atlanta branch president, Rafael Bostic, stood by his call for three quarter-point rate hikes in 2022, the first in March. But he said a more aggressive approach could be taken if economic data were warranted.

That could mean a rate hike at each of the remaining seven policy meetings in 2022, and it could even mean the Fed raises the federal funds rate by half a percentage point, doubling its typical amount, and that’s where it’s going in about 20 years. Unused tool.

“Every option is on the table at every meeting,” Bostic said Friday. “If the data shows that things have developed to the point where a 50 basis point change is required, or [would] is appropriate, then I’ll lean towards that. .. if it makes sense to move in consecutive sessions, I’d be happy with that.

“I do think there’s been a point of view that we had some meetings and we really just dialed it and didn’t have the ability to act, which was never my mindset.”

He added that he would be keeping a close eye on the slowdown in monthly consumer price increases and further evidence that Wages rise When considering his forecast for interest rates, it did not have a meaningful impact on higher inflation. He said he was encouraged by the latest employment cost index (hiking) report, which was released on Friday, tracks wages and benefits paid by U.S. employers and forecasts slower wage growth going forward.

Bostic’s comments echo those of central bank governor Jay Powell, who Refuse This week ruled out even the strongest policy response to quell inflation, which is running at its fastest pace in about 40 years.

Powell instead said the Fed would “Humble and agile” as it looks to “steadily move away” from the ultra-easy monetary policy implemented in early 2020 to protect the economy from the shock of Covid-19.

Market expectations have changed as a result, with traders now pricing in another 25 basis points of interest rate hikes this year, for a total of five rate hikes.

Fed embraces more hawkish stance Volatility in global financial markets has led to extreme volatility this month, with U.S. stocks falling sharply.

The Atlanta Fed president expressed little concern about the recent volatility, saying it was a natural reaction to the Fed starting to withdraw support.

“The reduction in easing should translate into tighter financial markets,” Bostic said. “The developments we are seeing in this regard are reassuring as the market is still functioning as it should and is responding to the situation in a reasonable and appropriate way.”

However, he said he was watching the overnight lending market closely, especially for signs of stress similar to the 2018 financial markets that were mired in further Fed tightening, despite fears of slowing growth.

Bostic, who also supports the Fed in reducing its $9tn balance sheet “As soon as possible” without compromising market functioning, he said he was “optimistic” about how the economy would perform in the coming months despite rising inflation.

He also dismissed suggestions that the Fed would raise rates in an overly aggressive manner that could prove harmful.

“Our policy path is not a tightening path. It is a less accommodative path,” he said. “If we do these three [interest rate increases] I think that still puts our policy in very accommodative space.

“I don’t think there will be much restraint on growth as we lift these emergency operations.”