Federal Reserve Bank of Atlanta President Raphael Bostic said Friday that the central bank should proceed with patience on interest rates, while keeping a watchful eye on inflation developments.
Speaking on CNBC, Bostic emphasized that the Fed has made progress but still has "ways to go on inflation." He argued that monetary policy ought to remain "somewhat restrictive" because the risk that inflation could remain stubbornly high persists.
Bostic also pointed to trade-related price dynamics as a factor he expects to observe in the months ahead. He said he anticipates some tariff impact will filter through the economy during the first half of 2026, a development he suggested could influence price levels.
On the Fed's objective for consumer prices, Bostic was explicit that policymakers want to see "clear evidence of return to 2% inflation" before implementing major shifts in policy. That condition, he indicated, remains a key benchmark for future decisions.
Turning to the Federal Reserve’s balance sheet, Bostic described its current size as "about right," signaling no immediate push for large-scale adjustment in that area.
On labor market conditions, Bostic said the outlook has improved relative to earlier concerns. He stated that the "downside risk to employment is much further away now" than had been the case, reflecting a lessened immediate threat to jobs.
Separately, Bostic offered his reaction to President Donald Trump's nomination of Kevin Warsh to be the next Federal Reserve chair. He congratulated Warsh, saying he does not know him well personally but has heard he is "thoughtful." If confirmed, Warsh would replace the current Fed chair, Jerome Powell, when Powell's term ends in May 2026.
Collectively, Bostic's remarks conveyed a preference for measured policy that remains attentive to inflation signals, while acknowledging both evolving labor-market prospects and an impending leadership transition at the central bank.