Atlanta Fed Pres.: We’ve Done ‘Easiest Part’ on Reducing Inflation, ‘Now, It’s Going to Take Some Time’

On Monday’s broadcast of CNBC’s “Squawk Box,” Atlanta Federal Reserve President Raphael Bostic stated that inflation is “not going to come down very quickly,” and that while there has been progress, the Fed has done “the easiest part of inflation reduction. Now, it’s going to take some time to work through the services, goods are going to still stay somewhat volatile.”

Bostic said, “[I]n my world, inflation’s not going to come down very quickly, and in that regard, then cutting rates doesn’t really fit into that scenario. So, the markets I think have been pretty optimistic about how easily inflation responds to our policy. Honestly, I hope I’m wrong and they’re right because that’ll mean that the economy’s in balance sooner than later, but it’s not my baseline case at all.”

He added, “I think what we’re going to see is an orderly decline. I’m hoping that we see what we’ve seen over the last several months, where inflation has come from a very high level to now it’s just a high level, but even if you look at most measures of inflation, they’re still two times where our target is. And so, there’s a long distance still to go.”

Bostic also stated, “There’s definitely been progress on inflation. And for me, I think we’ve done — if you think about this, the easiest part of inflation reduction. Now, it’s going to take some time to work through the services, goods are going to still stay somewhat volatile. One thing I would say that’s very encouraging to me, when you look at the CPI report that came out last week, less than 50% of the items in the basket now are showing a 5% increase or less.” And that “I think, in the next several months, the math is going to work in our favor, and the economy’s going to work in our favor.”

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