Fed's Bostic on July rate hike options: 'Everything is in play'
The Atlanta Fed president did not rule out 100 bps increase
FOX Business' Stuart Varney and Susan Li discuss the impact of inflation on stocks as markets open for the day.
Atlanta Federal Reserve Bank President Raphael Bostic said Wednesday that "everything is in play" when asked about the prospect of the central bank raising interest rates by a full percentage point later this month, expressing concern over the morning's news that inflation hit a fresh 40-year-high in June.
Bostic told reporters he still needed to study the "nuts and bolts" of the latest data, but said he felt "today's numbers suggest the trajectory is not moving in a positive way."
Raphael Bostic, president and chief executive officer of the Federal Reserve Bank of Atlanta (Photographer: Valerie Plesch/Bloomberg via Getty Images / Getty Images)
He said that Fed Chair Jerome Powell "has been clear, and I think I've been clear as well, that without price stability, it's hard to imagine how this economy is going to grow in a robust and sustainable way,"
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The Labor Department reported earlier that the consumer price index surged year-over-year by 9.1% last month, far higher than economists polled by Refinitiv had forecasted, and also an increase from May.
Federal Reserve Chairman Jerome Powell (Fox News)
The Fed already raised the benchmark interest rate by 75 basis points last month for the first time since 1994 and policymakers have confirmed that a similarly sized increase is on the table in July.
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With inflation running even hotter than economists expected in June, Wall Street is now ramping up the odds of a mega-sized, 100-basis point hike in July.
The Federal Reserve building in Washington, D.C. ((AP Photo/Patrick Semansky, File) / Associated Press)
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Prior to the CPI report, traders in the futures market saw a 14% chance of the Fed raising rates by 100 basis points. Following the news showing inflation hit its highest point since 1981, traders saw the likelihood of a full percentage point hike at more than 80%.
FOX Business' Megan Henney and Reuters contributed to this report.