Atlanta Fed President Rafael Bostic spoke with Yahoo Finance's Jennifer Schoenberger on Tuesday, just before the important CPI inflation data.
The central bank leader said the CPI data being in line with consensus expectations would be a “welcome development” in the Fed's fight for 2% inflation. Still, he said he expected “some turbulence” and that inflation would decelerate “at a very slow pace” throughout the year.
The inflation report, scheduled to be released at 8:30 a.m. ET, is expected to bring headline inflation to 3.4%, accelerating from February's annual price rise of 3.2%, according to Bloomberg estimates. Rising energy costs due to soaring gas prices are expected to be the driving force behind the increase.
On a “core” basis, which excludes more volatile food and gas prices, prices are expected to rise 3.7% year-on-year in March, slightly down from February's 3.8% annualized rise, according to Bloomberg data. It is said to be slowing down. .
Bostic said he expected only one rate cut in the fourth quarter, but given the strength of the U.S. economy, the Fed may need to “delay further” cuts. Still, if the pace of disinflation resumes, the central bank could bring forward rate cuts.
“Ultimately it depends on what the data shows,” he said.
Regarding growth, Bostic said, “The U.S. economy is incredibly resilient.” Just last week, strong labor data showed the U.S. economy added more jobs than expected in March as the unemployment rate fell and wage growth remained strong.
“In fact, we're very grateful that the economy is creating more jobs, production is increasing, wages are rising. These are all good things,” he said. “My outlook is that the economy will slow, but not as much as we expected in January.”
