Atlanta Fed President Raphael Bostic said that the decision to raise interest rates by 25 basis points at a time of banking crisis was not an easy decision.
“There was a lot of discussion, it wasn’t an easy or quick decision, but at the end of the day we decided there were clear signs that the banking system is solid and resilient. However, inflation is still very high,” Bostic told NPR News on Friday.
Less than two weeks before the Federal Open Market Committee (FOMC) meeting of Silicon Valley Bank, Silicon Valley Bank’s bankruptcy created too much uncertainty, and some policymakers are discussing waiting rather than a raise, Bostic said.
“The idea that we didn’t see things go bad before the weekend meeting was comforting, and it reassured me that we could make it,” said the Atlanta Fed President.
Fed Chairman Jerome Powell told reporters at a post-meeting news conference Wednesday that the possibility of a pause in rate hikes had been discussed in the days before the meeting, but the consensus for an increase during the meeting was strong.