January 8, 2018 / 7:27 PM / 6 months ago

Bostic: Fed should be cautious if yield curve continues to flatten

ATLANTA, Ga (Reuters) - Atlanta Federal Reserve bank president Raphael Bostic joined in warning that a flattening yield curve should be treated cautiously, and the central bank should avoid actions that could lead it to invert.

President of the Federal Reserve Bank of Atlanta, Raphael W. Bostic seen in this handout photo obtained by Reuters October 6, 2017. Federal Reserve Bank of Atlanta/Handout via REUTERS

“I am going to do all I can to make sure our policy does not invert the yield curve explicitly. We will be watching that,” Bostic said on Monday. “If we got close to it I would argue strongly that we should be extremely cautious” with further rate increases. He said his “base case” was for two to three rate increases in 2018, compared to a median of three among his colleagues.

Reporting by Howard Schneider; Editing by Andrea Ricci

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