Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee.
Atlanta Federal Reserve President Rafael Bostic warned Thursday that he believes tariffs are likely to cause long-term inflation, in contrast to a one-off cost surge.
“As a standard textbook model suggests, rather than a short, simple one-off shift in prices, Bostic said it expects geopolitical developments simultaneously with changes in US trade policies will lead to a “longer period increase” over a year.
Amid growing pressure from President Donald Trump to ease his monetary policy stance, Bostic firmly supported Federal Reserve Chairman Jerome Powell from Tuesday’s comments that central banks should wait to adjust their policy stance as they continue to track how fees affect prices.
Atlanta Federal Reserve President Rafael Bostic said changes in U.S. trade policy are expected along with simultaneous geopolitical developments that have led to “inflation rising” over a year. (Photographer: Getty Images / Valerie Press via Getty Images / Bloomberg)
Federal Reserve Chairman Powell has confirmed concerns about tariffs that have prevented interest rate cuts so far this year
Bostic, who is not a voting member of the Central Bank Rate Setting Federal Open Market Committee (FOMC), said the current period, marked by economic uncertainty, “there is no time for significant changes in monetary policy.”
The next FOMC meeting will be from July 29th to 30th. Trump’s 90-day suspension on the cleaning “mutual tariffs” he announced on April 2 will expire on July 9th.
Inflation measurements for March, April and May 2025 showed levels of inflation slightly above the Fed’s 2% target, and Bostic said tariffs “have not substantially affected consumer prices.” But Bostic said he believes it is not evidence that the economy has taken away tariff-related price pressures, but rather reflects a “corporate strategy” that will slow the rise in final rates until the final tariff rate is set.
Trump’s tariff policy reshaping online shopping habits, new reports discovered
Comments from the Atlanta FED chief at a lecture held in Frankfurt, Germany, came hours after the June unemployment report on Thursday, with employment exceeding expectations for the month, with the economy adding 147,000 jobs and unemployment rates reaching 4.1%.
The Fed has been stabilizing interest rates since December 2024, with the central bank reducing its target range by a quarter percentage point.
Federal Reserve Chairman Jerome Powell said Tuesday that he believes central banks will continue to cut interest rates if tariffs are not in place. (Reuters/Amanda Andrade Laud/File Photo/Reuters Photo)
Powell on Tuesday believes the Fed would continue to cut interest rates if tariffs were not implemented, adding that it was “pending when we saw the scale of the tariffs.”
Click here to get your Fox business on the go
Bosstack’s call for patience in monetary policy moves was when Richmond Federal Reserve President Tom Birkin assessed the central bank’s position on Wednesday.
In an interview with Fox Business’s “The Claman Countdown,” Barkin compared FOM’s efforts to identify the impact of tariffs on an economy that “passes through the fog.”
Bosstack’s call for patience in monetary policy moves was when Richmond Federal Reserve President Tom Birkin assessed the central bank’s position on Wednesday. (Photographer: Getty Images / Valerie Press via Getty Images / Bloomberg)
“I don’t know what the impact of policy will have on the economy,” Birkin said. “And unless there is urgency from a larger environment, I think I will do what I do when you run through the fog.
