Fed's Bostic: Rise in unemployment has been 'far less' than would be typical

<ul><li>Rise in unemployment would be far less than would be typical in the case given the reduction in inflation</li><li>Fed is in a very strong position right now</li><li>Fed can let restrictive policy continue to work to slow down inflation; expect the process will remain 'orderly'</li><li>Families are catching up to past price increases. </li><li>Pain of higher prices is easing and sentiment should follow</li><li>Goods inflation is back to pre-pandemic levels</li><li>Services inflation is moving more slowly and not expecting big drops</li><li>Many economic measures are back at levels seen in the years immediately before the pandemic</li><li>At this point shorter-term measures of inflation, such as over three and six months, are more important. They are pointing in a positive direction</li><li>Not comfortable declaring victory. Fed needs to 'remain diligent' and 'short run attentive'</li><li>Top line job numbers have been pretty strong.</li><li>The recent strength in jobs has been focuses in a relatively small part of the economy</li><li>Concentrated job growth means that slowing is occurring. Question is if job growth overall falls off a cliff.</li><li>Sees two 1/4% rate cuts by the end of the year (the Fed forecast 80 basis points of cut in their most recent dot-plot).</li><li>Risks are balanced with employment slowing, but inflation still above target. Bias is still to stay tight.</li><li>Policy will still need to be restrictive at the end of the year, but progress on inflation will warrant lower rates</li><li>Wants to be sure that inflation control is 'really, really' there before taking too many steps</li><li>Outlook now is not for inflation to rebound, but Fed still needs to pay attention</li></ul><p>Bostic is speaking at the Atlanta Rotary Club</p><p>As Bostic speaks, US stocks are stretching to new session highs. The NASDAQ is leading the way with the gain of 1.5%. The S&amp;P index is up 0.73%. The Dow Industrial Average is still lower but has erased most of its declines and is down only -0.06%. Shares of Boeing are dragging down that index with a decline of -6.36% (accounts for about 100 dow points). </p><p> Chevron (-1.56%) and JPMorgan (-1.45%) are also lower, but 18 of the Dow 30 are higher led by Intel which is up 3.79% today.</p><p>In the US debt market yields are lower:</p><ul><li>2- year yield 4.322%, -6.9 basis points</li><li>10-year yield 3.977%, -6.44 basis points</li><li>30-year yield 4.150% -5.0 basis points</li></ul>

This article was written by Adam Button at www.forexlive.com.