The U.S. Federal Reserve is not under immediate pressure to cut interest rates, according to Atlanta Fed President Raphael Bostic, who highlighted the risk of inflation getting stuck above the central bank’s 2% target or being sent higher by “pent-up exuberance.” He stated that he needs to see more progress in order to feel confident about inflation averaging 2% over time. Mr. Bostic also mentioned that the labor market and economy are prospering, allowing the Federal Open Market Committee to make policy without urgency. The Fed is expected to maintain the benchmark interest rate at its upcoming meeting and issue updated projections for rate cuts this year. Mr. Bostic expressed concern about prices for a larger-than-usual share of items still increasing at a rate of over 5% annually and the Dallas Fed’s measure of underlying inflation being just outside the central bank’s target.
