Fed’s Bostic says first rate cut should come in Q4 of this year By Reuters

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(Reuters) – The Federal Reserve is not expected to cut interest rates until later this year, Atlanta Fed President Raphael Bostic said on Wednesday, as he maintained his view that the U.S. central bank should cut interest rates only once in a while. 2024.

“We’ve seen inflation continue to increase,” Bostic said in an interview with CNBC. “If the economy is moving as I expect and there will be good progress in GDP and employment, and a gradual decrease in inflation over the course of the year, I think it would be appropriate for us to start moving towards the end of the year. this year, the fourth quarter.”

The fund kept interest rates steady at 5.25% to 5.5% last month, while many policymakers still expect a three-fold reduction this year, but its latest indicators show a gradual improvement in economic growth and continued economic and employment growth.

Two other Fed policy makers who looked different yesterday kept their forecasts for three cuts. Fed Chairman Jerome Powell is scheduled to speak on Wednesday.

Bostic said any weakness in the economy is getting worse and he expressed his concern that some secondary measures of inflation are higher than before.

“I have to make sure they’re not hiding more prices before I want to move our prices,” Bostic said. He now expects that inflation will decrease significantly through 2024 and 2025 with a figure of 2% reached “sometime at the beginning of 2026.”

Inflation is 2.5% in February, the lowest between 2022 and 7% but more than 2% of the target, and progressing slowly so far this year than last year.

“If the trend is slowing down, in terms of inflation, then we’re going to be more patient than I think a lot of people think,” Bostic said.

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