Jan 14 (Reuters) - Atlanta Federal Reserve President Raphael Bostic said inflation could "see-saw" if policymakers cut interest rates too soon, warning that inflation's descent towards the central bank's 2% goal was likely to slow in the months ahead, the Financial Times reported on Sunday.
Bostic, who will be a voting member on the Federal Open Market Committee this year, said he was "expecting to see much slower progression of inflation moving forward," adding that there were "some risks that inflation may stall out altogether" according to the report.
The Atlanta Fed president acknowledged that price pressures had fallen faster than he had expected in 2023 but still thinks inflation is likely to be nearly 2.5% by the year-end and only hit the Fed’s goal in 2025, the FT said.
After the Fed's December policy vote, Bostic said he thought rates would need to remain on hold until after the summer. He told the Financial Times that the uncertainty facing the U.S. economy warranted such a cautious approach.
"Inflation must be firmly and surely getting back to our 2% target," the newspaper quoted Bostic as saying. "It would be a bad outcome if we started to ease and inflation started to rise up and down like a see-saw. That would undermine people's confidence in where the economy is going." (Reporting by Juby Babu in Bengaluru; Editing by Hugh Lawson)
