"Assessing the Fed's Outlook on Interest Rates and Economic Realities"
Atlanta Fed President Raphael Bostic warns of a "new upside risk" in the form of "pent-up exuberance," where businesses, eager to capitalize on potential interest rate cuts, could unleash a surge in hiring and investment, leading to upward pressure on prices and reigniting inflation. This phenomenon has already been observed, with financial conditions loosening and employment surging. Bostic cautions that the fight against inflation is not over, and the Fed's rate-cut mania may have inadvertently exacerbated the situation, making the inflation fight harder and longer.