TechFlow news, on July 3, according to Jinshi Data, Federal Reserve's Bostic said Thursday that elevated U.S. inflation could persist for some time and may seep into consumer psychology. Businesses may need a year or more to adjust to ongoing changes in trade and other policies, suggesting a rationale for patience before cutting interest rates. He said: "The main conclusion is that the adjustment of prices and the broader economy to U.S. trade and other forthcoming policies, as well as geopolitical developments, will not be a brief and simple one-off price change as standard textbook models might suggest." "Instead, it increasingly appears to be a process that could take a year or longer to fully play out." "If I'm right, then the U.S. economy could experience elevated inflation for a longer period." Bostic said he expects prices to rise steadily rather than surge sharply, which could feed into consumer inflation expectations and pose greater challenges for the Fed. He also noted that nonfarm payrolls data released Thursday showed job gains exceeding expectations and the unemployment rate dipping slightly to 4.1%, indicating that "labor market conditions remain generally healthy" and have not yet shown signs of deterioration that might warrant preemptive rate cuts. He stated that the current high degree of uncertainty regarding employment, economic growth, and inflation direction is "not the time for a major shift in monetary policy," and he believes the FOMC's current wait-and-see stance remains appropriate.
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