Forex – Atlanta Fed President Raphael Bostic warned against maintaining a restrictive policy stance for too long because it could cause disruptions in the labor market and said he was not ready to declare victory over inflation now.
“We should not continue to maintain a restrictive policy stance for too long,” Bostic said in his quarterly statement yesterday. “I believe we cannot wait until inflation actually falls to 2% before we start lifting restrictions, as this would risk labour market disruptions that could cause unnecessary pain and suffering.”
“I think we are in a generally positive position right now. The labor market is still stable and we are getting closer to the Committee’s price stability objective,” Bostic said, adding that for the first time since 2021, he has refocused his attention on the dual mission of price stability and maximum employment.
Bostic, who noted that other indicators point to a broad slowdown in the U.S. economy but not an impending crash, argued that the latest monthly data supports his confidence that inflation is on a sustainable path toward the FOMC’s 2% target. Bostic emphasized that while inflationary pressures have eased significantly, risks to the achievement of the price stability mission remain, and policymakers must remain vigilant to ensure that these risks continue to diminish.
