Fed's Bostic (Retiring) says businesses in surveys say they expect to roll more tariff costs into prices this year and strategies to avoid that have run out

Prices/SCOTUS

• There is a risk that above target inflation will become the public's expectation.
• Tariff impacts on prices will eventually flow through, and the possible trajectory afterwards will be back to 2%.
• Difficult to know the fallout from the SCOTUS tariffs, it will raise questions about how pricing standards could change.

Economy

• US economy has remained remarkably resilient.
• 2.2% GDP for the year is a pretty strong number, given disruptions around trade and other issues.
• Any growth above around 1.8% suggests upward pressure on prices.
• Not hearing too many labour market concerns, appears the economy is at something of a plateau.
• Forecasts growth of 2.4% in 2026, 2.1% and 2027 and then at trend in 2028.

Monetary Policy

• Prudent for policy to remain mildly restrictive.
• Thinks neutral is 25-50bps below the current rate.
• Rate hikes would have to be on the table in the scenario that inflation moved the wrong way.