Fed's Bostic: Fed Must Remain Focused on Inflation, Monetary Policy Needs Patience

Odaily News Fed's Bostic emphasized that monetary policy requires patience. Bostic warned that the U.S. may be facing the risk of rising structural unemployment, a fundamental shift that cannot be fixed by interest rate adjustments alone. In response to this situation, the Fed is closely monitoring labor market slack across different groups. If the unemployment problem stems from structural factors, attempting to correct it through significant interest rate cuts could inadvertently push up inflation rather than create jobs. Despite encouraging improvements in productivity, Bostic maintains a hawkish stance on price stability. He cautioned against overly impulsive reactions 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 impulse to shift policy direction prematurely. (Jin10)