Atlanta Fed President Bostic: Restoring inflation to the 2% target is "crucial"

Atlanta Federal Reserve Bank President Raphael Bostic reiterated the importance of keeping interest rates at levels that can restrain economic activity and bring inflation back down to 2%.

"One thing I've realized is that we really don't want inflation," Bostic said in an interview on Friday. "Once inflation becomes deeply rooted in people's minds, it changes the way the economy evolves. That's one of the reasons I believe we need to keep policy in a restrictive stance and pull inflation back to 2%. This is critical."

Bostic is set to step down at the end of this month. He stated that he remains cautiously optimistic about the economic outlook for this year, citing the diminishing impact of tariffs and the potential boost from tax cuts passed by Congress last year.

He also downplayed recent pessimistic reports about hiring and layoffs, noting that due to the government shutdown, policymakers may need several months to clearly assess the health of the labor market.

"We haven't been able to get the data in time," he said. "My team tells me that it will be April or May before we start to pick up clear signals from the data and truly understand what's happening."

Federal Reserve officials paused interest rate cuts at their first policy meeting of the year last week, citing signs of stabilization in the labor market. Since that meeting, several Fed officials who have spoken publicly have said they remain concerned about persistently high inflation.

Earlier this week, Bostic said he does not expect interest rate cuts in 2026. He will retire from the Federal Reserve at the end of February.

U.S. President Trump announced last week that he intends to nominate former Fed Governor Kevin Warsh to succeed Jerome Powell as Chairman of the Federal Reserve. Powell's term as Chairman will end in May.

Editor: Chen Yujia