Fed’s Bostic in a interview with the Wall Street Journal:
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Tariff impact remains unclear: Bostic said it could take several months—or even a couple of quarters—for the full economic effects of new tariffs to become clear.
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Policy delay justified: The slow rollout of tariffs justifies the Fed taking more time to assess their influence on inflation and growth.
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Business responses vary: Firms in the Southeast are reacting differently—some passing costs to consumers, others absorbing them through lower margins.
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Too early to judge economic hit: It’s still uncertain whether tariffs will significantly hurt consumer demand or trigger another inflation surge.
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Caution on rate cuts: Bostic, like other Fed officials, is skeptical that conditions warrant rate cuts at the upcoming July 29–30 meeting.
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Inflation scars still fresh: The experience of high inflation in the early 2020s reinforces the need for prudence before cutting rates again.
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Fed independence emphasized: Despite political pressure, Bostic stressed the Fed must be prepared to make unpopular decisions in the economy’s long-term interest.
This article was written by Greg Michalowski at www.forexlive.com.