Fed’s Bostic: Fed’s fight against inflation is “still in early days.”

On Wednesday, in the context of prepared remarks to the Northwestern University Institute for Policy Research, Atlanta Fed president Raphael Bostic noted that the US Federal Reserve’s fight against inflation is “still in early days”.

Despite “glimmers of hope” in recent data, Bostic said “the overarching message I’m drawing…is that we are still decidedly in the inflationary woods, not out of them,” with the Fed’s target funds rate needing to rise to around 4.5% by the end of the year.


Bostic said he would like to cap rates at that point long enough to assess where the economy is heading. This does not imply rate cuts would follow. The Fed’s singular focus is that inflation head decisively back to the central bank’s 2% target.

There is “considerable speculation already that the Fed could begin lowering rates in 2023 if economic activity slows and the rate of inflation starts to fall,” Bostic said. “I would say: not so fast.”

“We should not let the emergence of (economic) weakness deter our push to lower inflation,” Bostic said, adding that “We must remain vigilant because this inflation battle is likely still in early days.”

The meeting of Fed’s policy committee, also known as FOMC will convene on Nov. 1-2 with policymakers expected to approve another three-quarter point rate hike even in the face of global market volatility.