Fed’s Bostic: Higher inflation on the cards
|Federal Reserve Bank of Atlanta President Raphael Bostic said on Thursday that the US economy is likely to face a protracted period of adjustment in response to new trade and policy dynamics, warning it “will not be short or simple” and could extend over a year or more.
Key Quotes
- Adjustment of prices to trade and other policies will not be short or simple; it could take a year or more.
- The labour market remains healthy; we do not see signs of serious deterioration.
- The US is likely going to see a period of higher inflation readings.
- Not the right time to shift monetary policy given uncertainty.
- The "wait and see" approach regarding interest rates remains appropriate, particularly given the economy’s resilience.
- There is a risk that high inflation could begin to influence consumer psychology.
- The Fed should consider making a commitment to stable inflation expectations more explicit in its framework.
- Businesses are delaying hiring and investments; expect demand to stagnate or decline if costs continue rising.
- Recent sanguine inflation readings are a result of businesses delaying price increases to get clarity on final tariff levels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.