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Fed's Bostic said he changed to a more dovish stance
Fed's Bostic said he changed to a more dovish stance as inflation has moved down a lot faster than he expected, in a Bloomberg TV interview. The employment side also factored in as the unemployment rate has moved up to suggested more balanced conditions. He does not believe it is hard to stay out of the political maelstrom. The worst thing the Fed can do is "not do the right thing," so the Fed can't be drawn into shorter run issues. The Fed is hearing the demand for products is weakening but is still solid. Businesses are not looking to expand but are also not looking to layoff a lot of employees. These conditions have given the Fed the space to be patient. What's your outlook over the next 6 months and how has that changed since the last couple of weeks. To him, "gradual" means taking 1 step at a time and then looking around. The first step will depend on the next couple of data points. If the data come in as expected, it would argue for a moderate cut. Were inflation to accelerate the Fed could remain on hold, while weaker than expected numbers could see a bigger cut. His long run rate is around 3%.