Federal Reserve member Bostic: The mistake of keeping interest rates high for a longer period will be the least harmful error.

Atlanta Federal Reserve Bank member Raphael Bostic said during his remarks on Tuesday that Federal Reserve officials should be cautious regarding upcoming policy decisions, citing the uneven progress in reducing inflation rates. He explained that the Federal Reserve making the mistake of keeping interest rates high for an extended period would have a lesser impact on the economy since it would ultimately lead to achieving the goal of price stability.

The key statements made by Bostic during his talk include:

• Considering the type of fluctuations in economic measures in the upcoming period, I believe this will require the approach of U.S. monetary policy to be more cautious.
• I want to ensure that we are getting the right signal and that the U.S. Federal Reserve's policy aligns with this correct signal.
• If we have to err, I would prefer to err on the side of being positive by keeping interest rates high for a longer period.
• I prefer the mistake of maintaining high interest rates for a longer time to ensure inflation reaches the 2% target.
• Interest rate cuts may be slower or delayed to ensure continued progress towards inflation targets.
• Interest rates are likely to remain high for a longer time than originally expected to achieve the inflation target.
• We want to ensure inflation reaches 2%, which means the U.S. Federal Reserve may need to keep its policy rate higher for a longer period than the markets might expect.
• Inflation trends may show periods of stagnation or more aggressive movements, reflecting variability in the data.
• Ensuring that the monetary policy of the U.S. Federal Reserve aligns with reliable signals - even amidst volatility - is a key focus for the Federal Open Market Committee's actions.