Fed’s Bostic says he doesn’t see rate cuts until well into 2024
1 min read . Updated: 15 May 2023, 07:06 PM IST
PremiumMy baseline case is we won’t really be thinking about cutting until well into 2024, Bostic said
Federal Reserve Bank of Atlanta President Raphael Bostic pushed back against bets in financial markets that the central bank will cut interest rates this year and cautioned against taking further hikes off the table if inflation doesn’t cool.
“My baseline case is we won’t really be thinking about cutting until well into 2024," Bostic said Monday in an interview on CNBC. “If you look at most measures of inflation, they’re still two times where our target is. And so that’s a long distance still to go."
The Federal Open Market Committee raised rates by a quarter percentage point at a meeting earlier this month, bringing its benchmark to a target range of 5% to 5.25% and signaling it may be ready to pause its tightening cycle at the next meeting in June.
Bostic made clear that he favors putting policy on hold to see the impact of aggressive Fed tightening since last year, with the economy also facing headwinds from tighter credit amid banking strains. But he also suggested that the next move may be more likely to be up than down, given the persistence of price pressures.