Atlanta Fed President: "It's Too Early to Declare Victory Over Inflation"

"On Track for 2% Target... Will Maintain Path"
US Inflation Expectations Lowest in 3 Years

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, said on the 8th (local time) that although inflation has slowed more than expected, it is still too early to declare victory.

At a discussion hosted by the Atlanta Rotary Club on the same day, President Bostic stated, "We are currently on a path toward the 2% target. Our goal is to maintain that path."

He referred to the 3-month and 6-month inflation indicators, saying that prices are moving toward the Federal Reserve's (Fed) target. He analyzed that the unemployment rate is lower than expected, wage growth exceeds inflation, and consumers' purchasing power is increasing, expecting this trend to continue.

President Bostic said, "We are currently in a very strong position," adding that the Fed can therefore maintain a restrictive monetary policy.

In the market, after the Fed held the benchmark interest rate steady at 5.25-5.5% for three consecutive times since the December Federal Open Market Committee (FOMC) meeting last year, it was interpreted as a signal of the end of tightening. Expectations are spreading in the market that the first rate cut could begin as early as March. Regarding this, President Bostic told reporters after the event that he expects the first cut to occur in the third quarter.

Meanwhile, a survey showed that Americans' expected inflation has fallen to its lowest level in three years. According to a consumer outlook survey conducted by the New York Fed in December last year, the median expected inflation one year ahead was projected at 3%. This is the lowest level since January 2021. The previous month’s figure was 3.4%. Expected inflation three and five years ahead was also lower than the November estimates, at 2.6% and 2.5%, respectively, compared to 3% and 2.7%.

This content was produced with the assistance of AI translation services.