(Reuters) – Atlanta Federal Reserve President Raphael Bostic on Thursday said inflation is going to return to the U.S. central bank’s 2% more slowly than many had expected, and “for me, that’s okay … I’m not in a mad dash hurry to get there,” because the economy is continuing to create jobs and wages are rising.
“I’m comfortable being patient,” Bostic said during an appearance before the Greater Fort Lauderdale Alliance in Florida. “I’m of the view that things are going to be slow enough this year that we won’t be in a position to reduce our rates towards … the end of the year.”
The Fed has kept its policy rate in the 5.25%-5.50% range since last July. Earlier this year most U.S. central bankers thought inflation was falling quickly enough to allow several rate cuts before the end of 2024. But hotter-than-expected inflation readings so far this year have changed minds.
Bostic has been at the vanguard of that change, projecting just one rate cut in the fourth quarter, and earlier this month going so far as to suggest the Fed may end up not cutting rates at all this year.
Monetary policy, Bostic said on Thursday, is restrictive and will slow the economy and move inflation to the Fed’s 2% target over the next two years.
“I’m going to be watching labor markets to make sure that we’re still creating jobs” and wages continue to rise faster than inflation, he said. “If we can keep those things going, and inflation has the signs that it is moving to that target, I’m happy to just stay where we are” on the policy rate.
(Reporting by Ann Saphir; Editing by Paul Simao)
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