It’s time for Fed not to lose sight of inflation mission
Fed’s job and inflation mandates are somewhat in tension
Need to be ‘laser focused’ on lowering inflation
Inflation is ‘a lot’ above the 2% target
No hire, no fire continues to be key labor market dynamic
The job market has been cooler but it’s not clear its fundamentally weaker
Hearing about stress from sectors that depended on foreign workers
Cost pressures are not just from tariffs
It’s very important we get inflation under control
Inflation issues are still one of the economy’s main challenges
Now ended pandemic supports had buoyed lower income Americans
In many ways U.S. has long had a K-shaped economy
High end consumers have been spending, economy has been resilient

Atlanta Fed President Raphael Bostic maintained a cautious, hawkish stance in his radio comments today, emphasizing that the Federal Reserve remains “laser focused” on returning inflation to its 2% target. He acknowledged that while the labor market is cooling, it is not yet fundamentally weak, describing the current environment as a “no hire, no fire” dynamic.

Bostic noted a growing tension between the Fed’s dual mandates of price stability and maximum employment. He highlighted that inflation remains significantly above target and remains a primary economic challenge. Furthermore, he pointed to a “K-shaped” economic reality where high-end consumer spending remains resilient, while lower-income households face increased stress following the end of pandemic-era supports.

Addressing supply-side concerns, Bostic mentioned that cost pressures extend beyond tariffs, citing specific labor stresses in sectors dependent on foreign workers.

None of this is a surprise as Bostic already said that he “penciled in no further reductions” in rates in 2026.That’s in contrast to a market that sees 53 bps in easing this year but in the short-term the odds of a cut only rise to 50% in April, as today’s non-farm payrolls report and lower unemployment rate pushed the timeline back.

On top of that, Bostic is retiring on Feb 28 and we’re waiting to hear who his replacement will be