Wednesday, Raphael Bostic, president of the Atlanta Federal Reserve Bank, said that he still thinks interest rates will drop by a quarter point this year, sometime in the October–December quarter.
As of now, Bostic still thinks that the federal funds rate will likely need to be lowered in the fourth quarter of the year. He wrote this in an essay that was posted on the website of his regional bank.
But he also said that he wasn’t “locked in” to any one policy path.
“It is possible that more cuts, no cuts, or even a raise would be the right thing to do,” Bostic wrote, adding that he would base his decision on “the facts on the ground” and the data.
With a vote, Bostic is on the Fed’s interest-rate committee this year. Since March, he has said that rates will go down once.
At the last meeting of the committee in the middle of the month, Fed officials said that they thought rates would be cut one time this year, down from three times in March of last year.
Bostic said that he thought the job market was getting weaker when he talked about the economy.
“Today, the job market might be thought of as loosening but not completely loose,” he said.
Bostic said that the most recent data on inflation “push against” the idea that things have stopped getting better.
“If things go as planned—the job market and the economy slow down in a normal way—inflation should drop all the way to 2% in 2025 or a little later,” he said.
People Bostic talks to in the service sector, which has the highest inflation rate, say that they are losing some of their pricing power, he said.
