Atlanta Fed president Raphael Bostic spoke to Yahoo Finance’s Jennifer Schonberger on Tuesday, just ahead of the release of critical CPI inflation data. Bostic expressed optimism about the Fed’s fight toward achieving 2% inflation, stating that a CPI print in line with consensus estimates would be a “welcome development.” However, he also cautioned that there may be some “bumpiness” along the way, with inflation decelerating at a slow rate throughout the year.
The inflation report, set for release at 8:30 a.m. ET, is expected to show headline inflation of 3.4%, an increase from February’s 3.2% annual gain in prices. This acceleration is largely driven by higher energy costs, particularly a jump in gas prices. On a “core” basis, which excludes the more volatile costs of food and gas, prices in March are expected to have risen 3.7% over last year, a slight slowdown from February’s 3.8% increase.
Bostic, who anticipates only one rate cut in the fourth quarter, suggested that the Fed may need to delay cuts further out due to the strength of the US economy. However, if disinflation resumes, the central bank could bring its cuts forward. He emphasized that the decision will ultimately depend on the data.
Regarding economic growth, Bostic praised the resilience of the US economy, citing a recent strong labor report that showed an increase in jobs, a decrease in the unemployment rate, and steady wage growth in March. He expressed gratitude for the positive indicators, stating that his outlook is for the economy to slow, but not as much as initially anticipated in January.
