Raphael Bostic, president of the US Federal Reserve in Atlanta, told CNBC on Monday that he was satisfied with the ultra-loose policy of the central bank even as inflation picked up in the economy.

“We still have 8 million jobs before our prepandemic,” said CNBC’s Bostic Steve Liesman during a “Squawk Box” interview. “Until we make substantial progress to fill this gap, we must have our policies in a very accommodative situation or attitude.”

The Fed keeps short-term benchmark rates close to zero and buys at least $ 120 billion worth of bonds every month.

That’s even the case when the consumer price index rose 4.2% in April, well above Wall Street’s expectations, and Bostic’s own GDPNow tracker from the Atlanta Fed expects growth of 10.5% in the second quarter.

April’s disappointing job report, with non-farm employment up just 266,000 from projections for 1 million, has likely put Fed policymakers on hold, where Bostic said it will until it sees a wider economic recovery.

“I’m a nervous guy. I always think about scenarios. Are we staying in our position too long? But I don’t see that now and I don’t really think we need to act.” he said. “So I’ll keep my eyes open and definitely pay close attention. But now is not the time to think about moving.”

The Fed is keen to maintain the policy until a full and inclusive employment target is met and will allow inflation to exceed its 2% target until it averages that level over an extended period of time.

Market-based inflation measures continue to rise. The 5-year breakeven point, which compares inflation-linked bonds with simultaneous Treasury bills, is 2.68%, its highest level since July 2008.

However, other measures, including the Fed’s preferred index of personal consumption expenditure and the Cleveland Fed’s measure of inflation expectations, are well within the central bank’s target range.

In fact, Bostic said he saw rising inflation as a positive sign. He and other Fed officials have written off recent price hikes due to temporary factors that are likely to subside later this year.

“I actually think that healthy inflation levels are a sign that the economy is healthy, that the economy will be dynamic and growing, and that this should lead to jobs for the people, all of whom are concerned about at the lower end of the wage distribution “, he said.

“So [if] We don’t have an economy where people are employed so they can have jobs and take a more sustainable path. Then we’ll have a much more difficult problem, “he added.

Bostic said Atlanta Fed researchers will spend the summer speaking to workers, business owners, and others to get a better measure of impending inflation expectations.

“I don’t think we’ll have any answers until early fall and it may take longer,” he said. “It all depends on how quickly we recover.”

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