Fed’s Bostic sees prolonged inflation from tariff impact

Fed’s Raphael Bostic signaled strong resistance to near-term rate cuts, citing uncertainty around trade policy and a still-resilient US economy. “This is no time for significant shifts in monetary policy,” he said, emphasizing that the FOMC should avoid decisions it may be forced to “quickly reverse”. With macro conditions steady, Bostic sees “space for patience” while waiting for greater clarity.

The Atlanta Fed chief pushed back on assumptions that the economic impact of Trump administration’s tariff and fiscal policies would be “a short and simple one-time shift in prices”. Instead, he argued that the adjustment process will likely take a year or more, and that both prices and growth may respond in drawn-out, non-linear ways. The implication is that the economy may undergo a “longer period of elevated inflation readings” as it digests structural shifts.

Bostic remains at the cautious end of the FOMC, projecting just one rate cut this year—compared to the median forecast of two.