Fed’s Bostic says tariff hikes could prompt rate cut if consumers pull back

May 10, 2019

MERIDIAN, Miss. (Reuters) – The U.S. Federal Reserve might need to cut interest rates if an escalating trade war with China drags on and leads consumers to cut spending in response to higher prices, a Fed policymaker said on Friday.

“I’m open to doing whatever it takes to keep us on target,” Atlanta Federal Reserve President Raphael Bostic said, referring to the prospect of the trade conflict leading the Fed astray of its targets of full employment and 2 percent inflation.

Asked if this could include interest rate cuts, Bostic said: “Depending on the severity of the response it could.”

(Reporting by Jason Lange; Editing by Chizu Nomiyama)

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