Fed’s Bostic: Did not expect inflation to go in a straight line

• Difficult to factor all potential policy changes into the economic outlook
• The question now is whether January CPI was a bump in the road or a new trend
• The confidence around the 2025 outlook has diminished
• Some proposals could add to inflation, others could boost productivity or lower price pressures
• Many business leaders are optimistic about regulatory changes, feel they could dominate those that add to costs
• Very supportive of getting the balance sheet down
• The Fed did not cut too much last year, policy remains restrictive
• Comfortable with taking a pause to see how the economy evolves

There is nothing market moving here but it’s notable that he’s talking about some downside risks to inflation from some of the policies floated out off Washington.

This article was written by Adam Button at www.forexlive.com.