Feb 6 (Reuters) - The U.S. Federal Reserve may need to lift borrowing costs higher than previously anticipated given the unexpectedly strong reading on jobs gains in January, Atlanta Federal Reserve Bank President Raphael Bostic said on Monday.
Unless the report proves to be anomalous, “It’ll probably mean we have to do a little more work,” Bostic told Bloomberg News. “And I would expect that that would translate into us raising interest rates more than I have projected right now.”
The Fed could also consider raising the rate by half-a-percentage-point, he told Bloomberg News, though that is not his base case.
Bostic had previously said he expects the Fed to need to push its benchmark rate, now in the 4.5%-to-4.75% range, to the 5%-to-5.25% range in order to get policy sufficiently restrictive to bring inflation back down to the Fed's 2% target. As of December, most of his colleagues agreed.
U.S. job growth accelerated sharply in January while the unemployment rate fell to 3.4%, its lowest reading since 1969, the Labor Department reported on Friday.
The Fed has said it expects the labor market to need to soften in order to reduce demand enough to bring down inflation that in December was running at 5% by the Fed's preferred measure.
