During an interview with Bloomberg on Friday, Atlanta Federal Reserve President Raphael Bostic predicted that “it will just take a while” for inflation to hit 2% and the Federal Reserve will be in a restrictive stance “well into 2024,” and stated that inflation is broad-based.
Bostic said, “We are, today, in a restrictive stance, and, as inflation continues to fall, the degree to which it’s restrictive actually grows as that gap between the inflation rate and our interest rate widens. So, I think that will put enough constraint on the economy that it will continue to slow, but again, I’m not expecting this to be a two-month or a three-month period. My outlook is that we’ll still be in a restrictive territory well into 2024, and it will just take a while for the inflationary pressures that we’ve seen over the last year-and-a-half to fully dissipate and get us back to 2%.”
He added, “[I]n all these indices, they track the prices for a number of different goods. At the height of the inflation trouble, 80% of the goods they tracked had inflation rates of 5% or more. Today, it’s 28%. And — this is in the CPI — and then, in ordinary times, it’s 15-20. So, if we can get back to that, that’s a great thing.”
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