Welcome to Extreme Investor Network, where we bring you the latest updates and insights on all things finance. Today, we’re discussing Atlanta Fed president Raphael Bostic’s recent interview with Jennifer Schonberger of Yahoo Finance, which took place just before the release of critical CPI inflation data.
Bostic stated that a CPI print in line with consensus estimates would be a positive development in the Fed’s efforts to achieve 2% inflation. However, he also cautioned that there may be some “bumpiness” ahead, with inflation decelerating at a slow pace throughout the year.
The upcoming inflation report, scheduled for release at 8:30 a.m. ET, is expected to show headline inflation of 3.4%, up from February’s 3.2% annual increase. This acceleration is primarily driven by higher energy costs, particularly a jump in gas prices. On a core basis, which excludes volatile costs like food and gas, prices in March are expected to have risen 3.7% year-over-year, slightly lower than February’s 3.8% increase.
Bostic indicated that he anticipates only one rate cut in the fourth quarter, but acknowledged that the Fed may need to delay cuts even further if the US economy continues to show strength. However, if disinflation picks up again, the central bank could bring the rate cuts forward based on incoming data.
Speaking about the US economy’s resilience, Bostic noted that recent strong labor market data, which showed more job additions than expected in March alongside steady wage growth and a decrease in the unemployment rate, are positive signs. He expressed gratitude for the increase in jobs, output, and wages, highlighting that his outlook is for a slowdown in the economy, but not as severe as previously expected in January.
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