03:31 PM EST, 11/12/2025 (MT Newswires) -- The Federal Reserve should keep its monetary policy steady until there's "clear evidence" that inflation is approaching the central bank's 2% goal, Atlanta Fed President Raphael Bostic said Wednesday.

Bostic, who also announced a plan to retire at the end of his term Feb. 28, said that labor market signals are not "clear enough to warrant an aggressive monetary policy response," especially amid persistent inflationary pressures.

Late last month, the Federal Open Market Committee lowered its benchmark lending rate by 25 basis points for a second straight meeting and reiterated concerns regarding the labor market. In his post-meeting remarks last month, Fed Chair Jerome Powell indicated uncertainty around a potential rate cut in December, while some central bank officials have expressed worries over continued inflationary pressures.

"I view the (FOMC's) monetary policy today as marginally restrictive and favor keeping the funds rate steady until we see clear evidence that inflation is again moving meaningfully toward its 2% target," Bostic said Wednesday in remarks prepared for a speech to the Atlanta Economics Club. "I do not view a severe labor market downturn as the most likely near-term outcome."

The consumer price index rose 3% year over year in September, equating to about 2.7% growth in the personal consumption expenditures price index, well above the Fed's target, Bostic said. The ongoing federal government shutdown -- the longest in US history -- has delayed key economic reports, including data on the PCE price index.

Bostic warned of "serious trouble" if medium- and long-term inflation outlooks move higher. "Should those things happen, history suggests that some pain, in the form of higher unemployment, could be required in order to move inflation expectations back into the long-run target range," he said.

The probability of a quarter-percentage-point rate cut next month was at 65% Wednesday, with the remaining odds in favor of a no-change scenario, according to the CME FedWatch tool.

"Moving policy near or into accommodative territory risks pumping fresh blood into the inflation beast and threatening to untether the inflation expectations of businesses and consumers," Bostic said. "I simply do not think that is the proper trade-off we should contemplate right now."

Separately, the Atlanta Fed said that Cheryl Venable, its first vice president and chief operating officer, will serve as an interim president.