Fed's Bostic: U.S. economy could experience longer period of high inflation

PANews July 3 news, according to Jinshi, Federal Reserve Bostic said on Thursday that high inflation in the United States may continue for a period of time, which may penetrate into consumer psychology, and it may take a year or more for businesses to adapt to the changes in trade and other policies. This suggests a reason to be patient before cutting interest rates. He said: "The main conclusion is that the adjustment of prices and the broader economy to US trade and other upcoming policies, as well as geopolitical developments, will not be a short-term and simple one-time price change as the standard textbook model suggests." "Instead, it looks more and more like a process that may take a year or more to fully end." "If I am right, then the US economy may experience higher inflation for a longer period of time." Bostic said, "I don't expect prices to soar sharply, but to rise steadily," which may penetrate into consumer inflation expectations and bring greater challenges to the Federal Reserve. He also said that the non-farm data released on Thursday showed that the number of new jobs exceeded expectations and the unemployment rate fell slightly to 4.1%. "Labor market conditions remain healthy overall," and have not yet shown signs of deterioration that may require a preemptive interest rate cut. He said the current high uncertainty in the direction of employment, economic growth and inflation "is not the time for a major shift in monetary policy" and he believed the FOMC's current wait-and-see attitude remained appropriate.