Fed's Bostic: Fed Still Needs to Focus on Inflation, Monetary Policy Must Be Patient

Odaily Fed's Bostic emphasized that monetary policy must be patient. Bostic warned that the United States may be facing the risk of rising structural unemployment, a fundamental shift that cannot be fixed by interest rate adjustments alone. To address this situation, the Fed is closely monitoring the labor market slack among different groups. If the unemployment problem stems from structural factors, attempting to correct it through significant interest rate cuts could inadvertently push inflation higher instead of creating jobs. Despite encouraging improvements in productivity, Bostic maintains a hawkish stance on price stability. He cautioned against reacting too impulsively to short-term economic "noise," believing that overreacting to immediate pressures could create more instability in the future. The Fed's top priority remains controlling inflation, and it must resist the urge to shift policy direction prematurely. (Jin10)