Fed’s Bostic warns inflation battle not over, urges restrictive stance

Investing.com -- Atlanta Federal Reserve President Raphael Bostic warned on Wednesday that the "inflation challenge has not been won yet," emphasizing the need for the central bank to maintain a restrictive monetary policy stance.

Speaking at an event in Atlanta, Bostic, who has announced his retirement for early this year, stated that inflation remains "still quite far" from the Fed’s target level.

Bostic expressed concern about potential economic acceleration through 2026, driven largely by tax and fiscal policies implemented by the Trump administration last year. These economic tailwinds could place additional upward pressure on demand and prices.

"As we go through 2026 the economy is likely to get stronger," Bostic said. "That could put more upward pressure on prices and that is something we have to watch."

The Fed official described the economy as "remarkably resilient" but cautioned that current economic conditions do not support a passive approach to monetary policy. "Those are not characteristics that suggest to me a passive posture is appropriate, still need to be restrictive," he noted.

Bostic also acknowledged the challenging environment for economic forecasting, adding that complete consensus within the Federal Reserve should not be expected on all policy matters.

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