Fed’s Bostic: Inflation is still the main concern

Atlanta Fed President Raphael Bostic said that high inflation remained the Federal Reserve’s main risk, but added that signs of labour market weakness still pointed to a single quarter-point rate cut this year.

Key Quotes

Price stability remains the primary concern, though a single quarter-point rate cut still looks appropriate this year.
Risks to inflation and the job market are closer to balance, but inflation is still above target.
The full implications of trade policy and other changes remain unclear.
Tariffs’ effect on consumer prices won’t fade quickly and may take months to materialise.
Firms can’t absorb higher tariffs for much longer.
We will not be complacent about risks to inflation expectations.
It’s not obvious that the labour market is materially weakening.
With hiring and labour supply both slowing, the US remains near full employment.
Businesses do not expect a big shift in the labour market, but if that happens I will be diligent in the policy response.
It remains unclear how consumer spending will evolve.
I do not have comment on Lisa Cook’s situation, the Fed needs to stay true to its mission.
Businesses still expect a solid year, and other evidence suggests Fed policy is not overly restrictive.
I’m not ruling out a September rate cut depending on the jobs report and other data.