Fed's Bostic says high inflation still central bank's main challenge -radio interview

By Michael S. Derby

Jan 9 (Reuters) - Federal Reserve Bank of Atlanta President Raphael Bostic said on Friday in a radio interview inflation issues are still at the forefront of his economic concerns, in comments that added the job market continues to be in a low-hire, no-fire mode amid broader uncertainties.

"Inflation is still too high" and the Fed's ?effort to control price pressures is missing the mark by a greater degree than anything having to do with the central bank's ?job mandate, Bostic said in an interview with radio station WLRN in Florida. When it comes ?to high price pressures, "you've got to get it under control, and we ?need to be laser-focused ?on making sure that everything we do is contributing to that," he said.

Bostic's interview happened after the release earlier in the ?day of hiring data detailing the performance of the ?job market in December. That report showed a modest payroll gain of 50,000 and a decline in the unemployment rate to 4.4% from 4.5% the prior month.

Underpinning ?last year's three quarters of a percentage point's ?worth of rate ?cuts from the Fed was a desire by policy makers to try to support the job market while at the same time still providing enough policy restraint to bring ?inflation back to the 2% target. Bostic, who will retire at the end of February, noted in the interview labor markets have cooled while expressing some doubt they're on a trajectory toward greater weakness.

"This is the time, I think, to make sure that we don't lose sight of the fact that even though labor markets have gotten cooler...we still have this big concern around inflation, and ?we know ?that consumers across the spectrum are feeling the pressure of high prices, and that has the potential to become mutually reinforcing and then weaken the economy in ways that ?will be harder for us to address," Bostic said.

Many economists still expect the Fed to cut interest rates this year as price pressures wane as tariff impacts abate. But the relative stability of the hiring data reported Friday gives the Fed space before it needs to make a decision to cut rates, a number of economists hold.

Bostic was asked about a plan by President Donald Trump to take $200 billion from government-sponsored housing companies to ?buy mortgage bonds in an attempt to make housing more affordable. While he did not address the plan directly, he noted "I do think that a lot of the housing affordability challenges are about more than just financing, and there's a supply and ?demand issue that has persisted in many major markets."

(Reporting by Michael S. Derby; editing by Diane Craft)