Fed's Bostic: Moving policy lower risks feeding the "inflation beast

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic spoke about economic trends at the Atlanta Economic Club on Wednesday. Bostic says he will step down as president of the Fed Bank of Atlanta early next year.

Key takeaways

I do not view a severe labor market downturn as the most likely near-term outcome.

I am not detecting unambiguous signals of a serious cyclical labor market downturn.

Real-time indicators signal the job market in a curious state of balance.

I don't read available indicators from recent months as a clear signal that the labor market is weak.

I see the labor market shifting rather than weakening.

Serious trouble awaits if inflation expectations for the medium- and longer-term drift upward.

We cannot breezily assume that inflationary pressures will quickly dissipate after a one-time bump in prices from tariffs.

Inflation expectations are not confined to importers directly affected by tariffs.

Firms surveyed expect to raise prices well into 2026, and by substantially more than 2%.

I see little to suggest price pressures.

Data from the Atlanta Fed surveys points decisively to continued upward pressure on prices and costs.

Moving policy lower risks feeding the "inflation beast."

I do not view a severe labor market downturn as the most likely near-term outcome.

Firms surveyed expect to raise prices well into 2026, and by substantially more than 2%.

I am not detecting unambiguous signals of a serious cyclical labor market downturn.

Real-time indicators signal the job market in a curious state of balance.

I don't read available indicators from recent months as a clear signal that the labor market is weak.

I see the labor market shifting rather than weakening.

Serious trouble awaits if inflation expectations for the medium- and longer-term drift upward.

We cannot breezily assume that inflationary pressures will quickly dissipate after a one-time bump in prices from tariffs.

Inflation expectations are not confined to importers directly affected by tariffs.

I see little to suggest price pressures.

Data from the Atlanta Fed surveys points decisively to continued upward pressure on prices and costs.

Moving policy lower risks feeding the "inflation beast."