Fed's Bostic (Retiring) says high end consumers have been spending, in many ways, US has long had a K-shaped economy; economy has been resilient, speaking via WLRN radio

Bostic's comments highlight the ongoing challenges the Fed faces in balancing inflation control with economic resilience.

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  • Important they get inflation under control, inflation issues are still one of the economy's main challenges.
  • Cost pressures are not just from tariffs.
  • No hire, no fire continues to be a key labour market dynamic.
  • Fed's job and inflation mandates are somewhat in tension.
  • Inflation is 'a lot' above the 2% target.
  • Need to be 'laser focused' on lowering inflation.
  • This is a time for the Fed not to lose sight of its inflation mission.
  • Hearing about stress from sectors that depended on foreign workers.
Context

His focus on inflation being significantly above the target suggests markets may need to price in continued hawkishness, especially as he emphasizes the necessity for the Fed to remain "laser focused" on this mission. The tension between inflation control and employment dynamics could influence future rate decisions, impacting both fixed income and currency markets.

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