Federal Reserve Bostic: Interest rates need to be maintained within a restrictive range to curb inflation.

Raphael Bostic, President of the Atlanta Federal Reserve Bank, said that the Federal Reserve should maintain the current interest rate level to continue putting downward pressure on inflation. Bostic said at a housing conference in Atlanta on Wednesday, "We need to maintain the status quo." He also added, "It can be said that we are achieving our employment goals, and now we must focus on price stability objectives. We need to maintain a restrictive policy stance." Last month, policymakers kept interest rates unchanged to allow more time to observe further progress on inflation and to better understand the potential impact of President Donald Trump's policies on the economy. The Federal Reserve's benchmark interest rate is currently in a target range of 4.25% to 4.5%, a full percentage point lower than in September of last year. New data on the Personal Consumption Expenditures Price Index, a key inflation indicator monitored by the Federal Reserve, will be released on Friday. Data released last Friday showed that the University of Michigan's one-year inflation rate expectation for the U.S. rose to 4.3% (up from 3.3%), while the five-year inflation rate expectation for February rose to 3.5% (up from 3.2%), reaching the highest level since 1995. Bostic stated last week that his base expectation is for the Federal Reserve to cut interest rates twice this year, in line with his forecast from December. However, he also mentioned that this forecast faces more uncertainty. The next Federal Reserve meeting is scheduled for March 18-19. Recently, as traders bet on further interest rate cuts in the U.S. and increased borrowing in Europe, U.S. Treasury yields have fallen this month, with yields now approaching German government bond yields. On Tuesday, the yield spread between the two countries' 10-year bonds narrowed to 184 basis points, the smallest gap since October. This spread is expected to see its largest monthly decline since May.