Bostic: Don't Cut Too Soon, Inflation Hasn't Tamed
Atlanta Federal Reserve President Raphael Bostic believes inflationary pressures in the US will remain "sticky" and persist throughout 2026. At a Metro Atlanta Chamber of Commerce board meeting on Thursday, Bostic said many companies are still factoring tariff costs into selling prices—a sign that cost pressures haven't completely disappeared from the consumer price chain.
Bostic emphasized that tariffs aren't the only source of inflation. He highlighted other components that remain volatile, including the cost of services like the medical sector. Given these conditions, he believes inflation is still at risk of remaining above target, so monetary policy cannot be eased quickly.
Even so, Bostic still views the US economy as quite resilient. He projects GDP growth in 2026 could still be above 2%, describing a "resilient" scenario even though interest rates remain at restrictive levels.
On the labor front, Bostic described the situation as neither too tight nor too loose—meaning the job market is no longer as hot as before, but it hasn't weakened enough to provide confidence that inflation will gradually decline on its own. In conclusion, Bostic signaled that the Fed needs to maintain its restrictive policy for longer, as he believes inflation remains too high to allow for aggressive easing in the near term.
Source: Newsmaker.id
