Atlanta Fed President Bostic
- Balance sheet reductions will inform appropriate pace of hikes
- His baseline suggests they won't need to hike rates above neutral
- Have not settled on appropriate pace for balance sheet runoff but expect symmetry of scale relative to the last one
- Comfortable with more aggressive rate hikes if data says that's appropriate
The balance sheet question is the near-term one but I think the market is going to be eyeing the debate above neutral. The long end of the curve is pricing the terminal rate and if we don't get above 2.25% or so then there will be plenty of life in the economy for years to come.