Fed's Bostic: Economy is expected to lose further momentum
|Raphael Bostic of the Federal Reserve Bank of Atlanta warned that rising price pressures over the next six to twelve months could intensify the Fed’s challenges.
Key Quotes
- A ton of economic scenarios that could play out, hard to assign probabilities.
- Outlook is for the economy to continue slowing, but also expect real uncertainty about what that means for jobs and inflation.
- Firms are still in a wait-and-see pattern around employment.
- Likely to be upward pressure on prices for six to 12 months; that puts pressure on the Fed.
- The most important question for the Fed is whether tariffs will shift prices once or more persistently.
- Policymakers would not respond to a one-time price shift, but there are compelling reasons to be sceptical.
- The way tariffs are unfolding makes it hard to pin down the impact and suggests the episode will last much longer than people anticipated.
- Businesses are using a mix of approaches in changing prices; ongoing discussion could shift expectations.
- Businesses will continue adjusting to tariffs well into next year.
- Fundamentals of the economy are still quite solid.
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