The president of the Atlanta Federal Reserve said inflation will continue to fall toward the 2% target.
The president of the bank of the Atlanta Federal Reserve, Raphael Bostic, said this Friday that he now expects only a cut of interest rates of a quarter of a percentage point this year, compared to the two cuts it had previously projected, a turnaround driven by persistent inflation and stronger-than-expected economic data.
The Atlanta Federal Reserve is one of the twelve reserve banks that constitute the United States Federal Reserve System. It covers the sixth federal reserve district that includes Alabama, Florida and Georgia, as well as parts of Louisiana, Mississippi and Tennessee.
“I’m definitely less confident than I was in December” that inflation will continue to fall toward the 2% target. Federal ReserveBostic said in comments to reporters. The president of the reserve atlanta is one of the most influential in the system and usually anticipates the actions that the United States Federal Reserve (Fed).
Bostic’s insights
The reference led him to reduce his perspective of rate cuts and delay the probable start date to later in the year. The leader had previously said that rate reductions could begin as early as this summer and a majority of market analysts expect the Federal Reserve reduce rates starting in June.
Bostic said the economy has proven more resilient than anticipated and recent data led him to roughly double his economic growth estimate of USA by 2024 at 2%. The official saw little or no change in the current unemployment rate of 3.9%, a level considered inflationary until recently, he added.
While Bostic believes inflation is in a lower “arc,” it may be rising more slowly, citing concerns about the number of items still seeing outsize price increases. The balance of risks has tilted toward a longer wait before easing monetary policy, said Bostic, who has a vote on the central bank’s interest rate policy this year. USA.
Bostic is the first official of the Fed to speak publicly since the meeting of the Federal Open Market Committee on Wednesday. The Federal Reserve held rates steady in the 5.25% to 5.5% range at the meeting and most policymakers still expect at least three rate cuts this year, but its new projections reflected slower progress on fighting against inflation and continued economic strength.
“If we have an economy that is growing above its potential and we have an economy where unemployment is at levels that were considered unimaginable without price pressures, and if we have an economy where inflation is moderating. That’s good and it gives us room for patience,” he said.
Source: Ambito
