Mumbai, Sept. 4 -- Atlanta Fed president Raphael Bostic has noted that while the federal funds rate the Fed controls directly influences short-term rates, it is not a dominant force that dictates all interest rates across the US economy. Bostic stated that the economy is in a transition period. Unlike most of the past several years, when risks to the inflation mandate were clearly the greater risk, risks to the employment mandate have increased such that the relative risks are more balanced.
In formulating a monetary policy stance, Bostic explains that it is his duty to determine whether the risk of not reaching our inflation goal is greater than, smaller than, or the same as the risk of not hitting the maximum employment goal. He notes th...