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The president of the Federal Reserve, Jerome Powell, testifies to the Chamber Financial Services Committee.
The president of the Atlanta Federal Reserve, Raphael Bostic, warned Thursday that he believes that tariffs are likely to cause a prolonged section of inflation instead of a unique increase in costs.
Instead of “a short and simple prices change, as the standard textbook models would suggest,” Bostic said he expects changes in the United States commercial policy along with concurrent geopolitical developments to lead to “a longer period of high inflation” in the course of a year or more.
In the midst of the growing pressure of President Donald Trump in the Fed to loosen his monetary policy position, Bostic firmly supported the comments of the president of the Federal Reserve, Jerome Powell, on Tuesday that the Central Bank should wait to adjust its policy position while continuing to track how tariffs could affect prices.
The president of the Atlanta Federal Reserve, Raphael Bostic, said he expects changes in the commercial policy of the United States along with concurrent geopolitical developments to lead to “a longer period of high inflation” in the course of one year or more. (Photographer: Valerie Plesch / Bloomberg through Getty Images / Getty Images)
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Bostic, who is not a voted member of the Federal Open Market Committee of the Central Bank (FOMC), said that the current period marked by economic uncertainty “is not time for significant changes in monetary policy.”
The next FOMC meeting is July 29-30. Trump’s 90 -day pause about Trump’s “reciprocal tariffs” announced on April 2 will expire on July 9. The secretary of the Treasury, Scott Besent, said on Thursday “Morneings With Maria” of Fox Business that he hopes that “a flow of agreements” will be announced before the deadline of next week.
The inflation readings of March, April and May 2025 showed inflation levels that were slightly around the 2% target of the Fed, which Bostic said the rates “had not substantially affected consumer prices.” However, Bostic said he believed that pink data in recent months reflected “the strategies of the companies to delay the increases in substantive prices” until the final rates are established, instead of evidence that the economy had stolen the price -related price pressures.
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The comments of the Atlanta Fed Chief at a conference in Frankfurt, Germany, occurred hours after the June unemployment report showed that the hiring for the month exceeded expectations, with the economy adding 147,000 jobs and the unemployment rate increased to 4.1%.
The Fed has maintained stable interest rates since December 2024, when the Central Bank reduced its objective range in a quarter of a percentage point in the middle of what seemed that markets as a rate of reduction of rates that would continue.
The president of the Federal Reserve, Jerome Powell, said Tuesday that he believes that the Central Bank would have continued to reduce interest rates if rates had not been implemented. (Reuters/Amanda Andrade-Rhoades/File photo/photo of Reuters)
Powell said Tuesday that he believes that the Fed would have continued to reduce interest rates if tariffs had not been implemented, and added that “we are waiting when we saw the size of the rates.”
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Bostic calls for patience in monetary policy movements echoed the evaluation of the president of the Richmond Federal Reserve, Tom Barkin, from the position of the Central Bank on Wednesday.
In an interview with “The Claman Countdown” by Fox Business, Barkin compared Fed’s efforts to discern the impact of tariffs on the economy to “conduct through fog”, a metaphor that has used since March to describe the difficulty facing the FOMC.
Bostic calls for patience in monetary policy movements echoed the evaluation of the president of the Richmond Federal Reserve, Tom Barkin, from the position of the Central Bank on Wednesday. (Photographer: Valerie Plesch / Bloomberg through Getty Images / Getty Images)
“You don’t know what the impact of politics on the economy will be,” Barkin said. “And as long as there is no urgency of the greatest environment, I think one does what you do when you drive through the fog, which goes slowly.”
