- Atlanta Federal Reserve President Raphael Bostic said recent economic data has made him “more confident” the U.S. Federal Reserve can get inflation back to its 2% target, but he wants to see “a little more data” before he is ready to support a rate cut.
- Bostic, speaking at an event in Atlanta on Tuesday, said that balancing risks between inflation and the labor market was close, but he wanted to make sure to avoid cutting interest rates too early so that the Fed would not have to raise them later if inflation accelerated again.
- If the economy develops as expected, interest rates will fall by the end of this year, he said. “I am prepared to wait, but it is coming... it is coming.”
- Financial markets widely expect the Federal Reserve to cut interest rates at its September 17-18 meeting, marking the first such move in the current monetary tightening cycle.
- The US Federal Reserve began raising its benchmark overnight lending rate in March 2022, increasing it from near zero to the current range of 5.25 to 5.50%, and has remained there since July 2023.
- Inflation has started this year stronger than expected, prompting policymakers like Bostic to change their expectations about how quickly interest rates will start to be cut.
- Inflation data has improved in recent months but jobs data has been somewhat subdued as job creation slows and the unemployment rate rose to a post-pandemic high of 4.3% last month.
