Federal Reserve Bostick: U.S. economy may experience longer periods of high inflation "
Online reported that Federal Reserve Bostick said on Thursday that high inflation in the United States may persist for some time, which may penetrate into consumer psychology, and it may take a year or more for companies to adapt to ongoing changes in trade and other policies. This hints at reasons for being patient before cutting rates. "The main conclusion is that price and broader economic adjustments to U.S. trade and other upcoming policies, as well as geopolitical developments, will not be brief and simple one-time price changes, as standard textbook models imply," he said. "Instead, it's looking increasingly like a process that may take a year or more to fully conclude." "If I'm right, then the U.S. economy may experience a longer period of high inflation." Bostic said,"I don't expect prices to surge significantly, but to rise steadily," which may penetrate into consumer inflation expectations and pose greater challenges to the Fed. He also said that non-agricultural data released on Thursday showed that new jobs exceeded expectations, the unemployment rate fell slightly to 4.1%,"labor market conditions remain generally healthy," and showed no signs of deterioration that a pre-emptive interest rate cut may be needed. He said that the current high degree of uncertainty in the direction of employment, economic growth and inflation is "not the time for a major shift in monetary policy," and he believes the FOMC's current wait-and-see attitude is still appropriate.
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