MNI BRIEF: Fed's Bostic Says Bumpy Inflation Calls For Caution
MNI (WASHINGTON) - Federal Reserve Bank of Atlanta President Raphael Bostic sees "very gradual" disinflation in 2025 and said bumpiness in the data "will call for our policy approach to be more cautious," according to a podcast recorded Dec. 9 released Tuesday.
"And if we’ve got to err, I would err on the upside. I would want to make sure — for sure — that inflation gets to 2 percent, which means we may have to keep our policy rate higher longer than people might expect, or we may have to be more deliberate in the pacing of reducing our policy," he said. (See: MNI INTERVIEW: Fed Won't Consider Cuts Until March - Benigno)
Twelve-month measures of headline and core PCE inflation have flatted at around 2.4% and 2.7%-2.8%, respectively, in the second half of 2024, and the FOMC last month said it would likely cut rates by just 50 bps this year.