Perselisihan internal Federal Reserve semakin memanas! Ketua Federal Reserve Atlanta: kemungkinan tidak ada penurunan suku bunga hingga 2026

The Chairman of the Atlanta Federal Reserve, Raphael Bostic, stated that due to the potential upward pressure on inflation from the Republican tax bill, the Federal Reserve is likely unable to cut interest rates in 2026. He did not include any rate cuts in his forecast for next year, as the Fed must maintain a tightening stance solely to defend the inflation line. This hawkish remark stands in stark contrast to the Fed’s three consecutive rate cuts last week, and Bostic does not support that rate cut decision.

Reform Law Becomes New Inflation Engine

Bostic’s core argument focuses on the inflation effects of the Republican tax bill. He pointed out that the economic rebound following the record-long government shutdown, along with some stimulative policies in the tax reform bill, should lead to stronger economic growth next year than this year. “Many of these factors are about to show effects, and I believe this will inject momentum into the economy and likely exert some upward pressure on inflation.”

This analysis is not unfounded. The Republican-led tax reform typically includes corporate tax cuts and personal income tax reductions, which in the short term stimulate consumption and investment demand. When economic capacity is nearing saturation, additional demand stimulation will directly translate into upward price pressures. Bostic’s concern is that the hard-won anti-inflation achievements of the past two years could be eroded by the side effects of fiscal stimulus policies.

Even more concerning are signals from the corporate sector. Bostic pointed out that many companies plan to raise product prices in 2026 due to rising raw material costs. These price hikes are not limited to “tariff-focused companies” but are widespread across industries. This widespread expectation of price increases is precisely the precursor that policymakers fear most—an unanchored inflation expectation.

Three Pillars of Bostic’s No-Rate-Cut Forecast

Tax reform stimulates demand: The stimulative effect of the Republican tax bill will be concentrated in 2026, injecting excessive liquidity into the economy

Widespread price hikes planned by companies: Rising raw material costs are prompting industries to prepare for price increases, and inflation expectations are becoming entrenched

Recession risk has dissipated: Labor market resilience exceeds expectations, with a significant drop in unemployment reducing the likelihood of a recession

Inflation Beast Not Dead, Target in 2028

Bostic used a vivid metaphor to describe the current inflation situation: “I am indeed worried that we prematurely declare the inflation beast has been slain, rather than continuing to manage risks through price stability measures to ensure it does not run out of control again.” This sense of crisis in his wording far exceeds the standard language of the Fed’s official statements.

His timeline forecast is even more shocking to the market: inflation will only fall to the Fed’s 2% target level by 2028. This means that from now, another three years of tightening or neutral policies are needed, far beyond the market’s mainstream expectations of rate cuts in 2025-2026. If this forecast proves true, it will fundamentally rewrite asset pricing logic.

This hawkish stance and divergence from the mainstream Fed position were already evident in last week’s rate decision. The Fed cut the benchmark rate for the third consecutive time, lowering the range to 3.5% to 3.75%. However, Bostic explicitly stated that he does not support this rate cut. He believes that the risk of persistent high inflation concerns him more than a softening labor market.

Such internal disagreement is not uncommon. The Federal Open Market Committee (FOMC) decision is always a compromise of various viewpoints. But when a regional Fed president publicly expresses such strong dissent, it often signals rising uncertainty about future policy paths. Bostic is not a voting member of the FOMC this year, which gives him more freedom to speak, but also means his views currently do not influence actual decisions.

Recession Risks Dissipate, Changing Policy Trade-offs

Another key shift in Bostic’s discourse is his assessment of recession risks. He stated that the U.S. economy no longer faces the risk of a significant rise in unemployment leading to a recession. This judgment is extremely important because it changes the logic of monetary policy trade-offs.

Over the past year, the Fed’s core dilemma has been: continued tightening could crush the economy and trigger a recession, but easing too early could reignite inflation. When recession risks are high, policy tends to tilt toward preemptive rate cuts. But if recession risks have dissipated, policy space shifts toward fighting inflation.

This shift is underpinned by the labor market’s unexpectedly strong resilience. Despite aggressive rate hikes, the U.S. unemployment rate remains at historic lows, job vacancies far exceed job seekers, and wage growth, while slowing, remains above inflation. This “soft landing” scenario allows the Fed to address inflation more calmly without risking economic collapse.

Bostic is set to leave office when his term ends in February 2026. His departure is not without controversy: he is one of several officials who violated Fed securities trading rules. Although this episode affected his reputation, it did not diminish his market influence through professional judgment. As an outgoing official, his remarks may be even more candid, unencumbered by political considerations.

Market should be alert that Bostic’s views, while currently minority, may represent the true thoughts of hawkish factions within the FOMC. If future inflation data falls short of expectations or the stimulative effects of tax reform become evident, this hawkish perspective could quickly move from the fringe to the mainstream. For assets relying on low interest rates, the risk of zero rate cuts or even resumption of rate hikes is not alarmist.