This Fed Official Says Rate Cuts Are ‘Coming’—But He Needs More Data to Be Sure
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Elijah Nouvelage/Bloomberg via Getty Images Raphael Bostic, president and chief executive officer of the Federal Reserve Bank of Atlanta, speaks during a Bloomberg Television interview in Atlanta, Georgia, US, on Friday, Nov. 3, 2023.
Key TakeawaysAtlanta Federal Reserve Bank President Raphael Bostic said he wants to see more economic data before supporting interest rate cuts.Despite recent tumult in financial markets, the economy has momentum and is supported by a still-strong labor market, he said.Bostic said inflation is affecting fewer categories, indicating widespread price increases are easing.
At least one Federal Reserve official wants to see more data before making any decisions on the central bank's influential interest rate. Atlanta Federal Reserve Bank President Raphael Bostic told an audience Tuesday that interest rates were likely on their way, but didn’t specifically address whether he thinks the U.S. central bank will cut its influential fed funds rates at its September meeting. Bostic’s comments come as Federal Reserve officials are keeping a close eye on economic data, looking for the confidence to cut its decades-high interest rate designed to tame inflation.Bostic still wants to see “a little more data" before making that decision, he said in Atlanta at the Conference of African American Financial Professionals.The Economy Remains Strong, Bostic SaidAfter rising in the first quarter of the year, inflation has resumed its path toward the Fed's annual goal of 2%. Bostic said the past four months of data have given him more confidence that price pressures were easing sustainably.While recent data has alarmed some market watchers, Bostic predicted the economy will withstand the weaknesses. “A recession is not in my outlook,” Bostic said. “I think there’s still enough momentum in the economy where we could see slowing but not see labor markets deteriorate to a level of considerable concern.”Fed Has To ‘Be Sure’ About Rate CutsA lot of economic data released this week could influence the Fed's decision on rates.Key inflation and consumer spending data will follow a measure of July's wholesale price increases that came in lower than expected.Bostic said he is paying attention to the data because if the Fed cuts interest rates before inflation is under control, it would create too much market uncertainty.“We have to be sure that trend is real,” Bostic said. Read the original article on Investopedia.
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