Atlanta FED President Raphael Bostic outlined his views on the path of interest rates in an interview with CNBC on Wednesday, suggesting that interest rate cuts should not be made until the fourth quarter of 2024.
Atlanta FED President Bostic Predicts Interest Rate Cuts Will Be Delayed Until the Fourth Quarter
Bostic's comments diverge from the expectations of many of his colleagues at the Federal Reserve, who predicted multiple rate cuts throughout the year.
Bostic emphasized a cautious approach and predicted that only a quarter point interest rate cut would be appropriate for 2024. This forecast contrasts with the more dovish outlook adopted by other Fed officials.
“We've seen inflation become much more volatile,” Bostic said. “If the economy develops as I expect. I think it would be appropriate for us to start moving downwards at the end of this year, in the fourth quarter,” he said.
While Bostic's comments offered a specific timeline for potential rate adjustments, few other Fed officials have been this explicit in public statements about the interest rate outlook.
Fed Governor Adriana Kugler echoed Bostic's views on the unbalanced nature of recent inflation trends.
Kugler acknowledged the progress made on inflation, but emphasized that disinflationary pressures continue.
Speaking at Washington University in St. Louis, Kugler suggested that rate cuts may be necessary throughout the year if current disinflation and labor market conditions persist.
Kugler refrained from giving details about the timing or size of possible interest rate adjustments, emphasizing the need to be prudent and adaptable in monetary policy decisions.
The disagreements among Fed officials underscore the complexity and uncertainty surrounding the economic landscape.
As policymakers navigate these challenges, market participants await further guidance on the future course of interest rates and the broader monetary policy stance.
*This is not investment advice.