Fed's Bostic (2027 Voter) says he expects GDP to grow upward of 2% in 2026

• Expects inflationary pressure to continue in 2026.
• Many businesses are still incorporating tariffs into prices.
• Inflation pressure is beyond tariffs with other factors like medical adding to inflationary pressure.
• Labour market is balance and is not too tight nor too loose.
• Government shutdown will continue to distort data until April or May.
• Fed needs to stay restrictive because inflation remains high.
• Fed's independence gives them the ability to be patient.

Fed's Bostic's comments indicate a moderate GDP growth outlook for 2026, but his emphasis on persistent inflationary pressures suggests that the Federal Reserve may need to maintain a restrictive stance on policy. This signal of sustained inflation and a balanced labor market could impact rate expectations and support the dollar, while cautioning against any premature easing of monetary policy.