The words of the president of the Atlanta Fed could confirm the sentiment of Wall Street operators who hope that the cut in interest rates will begin soon.
“I have had to adjust my projection“Admitted Raphael Bostic, president of the Atlanta Federal Reserve.”My projection was that the growth rate of the Gross Domestic Product would be 1%. It is at 2.5%. That’s a big jump.” The employment situation is also going well, with unemployment not increasing significantly with the fall in inflation, the economist added. Therefore, inflationary dynamics would be on the right path towards the US Central goal.
“A year ago, unemployment was 3.4%. Today it’s at 3.8%,” said Bostic, who has been president of the Federal Reserve Bank of Atlanta since 2017. “That’s not what you’d expect to see with falling inflation.. When I took this job, the unemployment projection was 4.2% with inflation at 2%. We are in a very strong position right now“.
Bostic, who has been president of the Federal Reserve Bank of Atlanta since 2017, when asked about current inflation in the United States and whether Bostic would describe the situation as inflation, deflation or disinflation, replied: “This is disinflation“Bostic said. “The amount (of inflation) is less than the previous year. We were at 7%. Now we are at 3%. Today we have disinflation. That is desirable“.
Bostic added that it is reassuring that revenues have been increasing faster than inflation. “We should expect that to continue,” she said. Regarding the Federal Reserve starting an interest rate cut soon, Bostic said he favored two cuts this year, probably in the third and fourth quarters. “My thinking has changed,” Bostic said. “Before it had only planned one rate cut this year. Now I’m considering two“.
Federal Reserve, interest rates and future cuts
However, Bostic said his inclination is to be more conservative. “I have a natural bias to be stricter. I’m comfortable with that,” Bostic said. “I just want to see the economy continue to evolve. My projection for the end of this year is 2.5%, it is still not 2%. Some slowdown will be necessary.” What the economist was referring to is the Federal Reserve’s stated goal of bringing inflation to 2%. Still, Bostic said the economy is headed in the right direction.
“We’re on our way to 2%. Today we’re at 3%,” Bostic said. “The goal is to make sure we stay on that path“concluded the Federal Reserve representative.
Source: Ambito
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