Bostic advocates for a less restrictive monetary policy to balance the risks to price stability and maximum employment, noting that inflation has significantly decreased from over 7% in mid-2022 to under 3% by early 2025.

Bostic's positive economic forecast acknowledges the risks to both price stability and the labor market, with ongoing research assessing potential cooling in the labor market.

The Federal Reserve is currently conducting a strategic review of its monetary policy framework to adapt to evolving economic conditions and gather public input on the effects of its policies.

He also observes that rental price growth is softening, which is expected to eventually be reflected in official inflation statistics.

In January 2025, the Federal Open Market Committee maintained the federal funds rate target between 4.25% and 4.5%, following a one percentage point reduction over the previous year.

Atlanta Fed President Raphael Bostic highlights the importance of a cautious and humble approach to monetary policy, emphasizing that despite a broadly healthy economic outlook, uncertainties persist.

The quits rate, which reflects job confidence, has dropped to levels not seen since 2015, suggesting that fewer workers feel secure enough to leave their jobs voluntarily.

Despite elevated inflation levels, progress towards price stability continues, with housing prices identified as a major contributor to persistent inflation.

Inflation is anticipated to fluctuate but is expected to trend towards the 2% target, with recent data showing mixed signals regarding price pressures, particularly from shelter-related costs.

Economic indicators suggest that inflation expectations remain stable, aligning with pre-pandemic norms, and no immediate surge in inflationary pressures is anticipated.

These uncertainties are influenced by various factors, including trade and immigration policies, with business contacts expressing concerns over potential tariffs and labor supply disruptions.

While the labor market remains stable, indicated by a 4% unemployment rate and solid payroll growth, signs of softening are emerging, making job finding more challenging for unemployed workers.