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ONE CUT IN 2024
Powell spoke shortly after Atlanta Fed President Raphael Bostic, who also sits on the central bank’s rate-setting committee, told CNBC he now thinks policymakers should make just one rate cut this year, in the final quarter of 2024.
Bostic has been on a journey about the timing of cuts in recent months, moving from expressing reservations about early cuts to voicing cautious support for starting them by summer.
But the first few months of the year have seen an uptick in inflation, while both the economy and the labor market have shown signs of resilience, leading him to change his outlook once more.
“I’ve gone back to where I was before, because we’ve seen inflation kind of become much more bumpy in its trajectory,” said Bostic, one of just 12 policymakers on the 19-person committee with a vote on monetary policy this year.
“We’re just going to have to watch and wait and see how things evolve,” he added.
If the economy continues to develop as expected, Bostic said it would be “appropriate” for the Fed to start cutting rates in the final quarter of this year.
“My outlook right now is that inflation is just really just going to drop incrementally through the course of 2024,” he said, adding he did not expect the Fed to hit its long-term target of two percent before early 2026.
“I think we have time to be patient, and we can just watch the economy and see if that’s how things actually play out,” he said.
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