T4K3.news

Bostic expects one rate cut in Q4 2024

Fed President Raphael Bostic sees a possible cut in interest rates as inflation declines.

June 27, 2024 at 06:27 PM

Fed's Bostic sees one rate cut in Q4 amid 'subtle signs of hope' of inflation falling

Fed President Raphael Bostic suggests a potential interest rate cut in late 2024 as inflation shows signs of easing.

Fed's Bostic predicts one rate cut in Q4 amid signs of inflation decline

Atlanta Fed President Raphael Bostic announced that the Federal Reserve may cut interest rates once in 2024 as inflation rates show signs of gradually decreasing. In a video message on Thursday, Bostic emphasized a careful approach over the coming months. He noted that despite inflation's ongoing decline, a 'patient and vigilant' policy is necessary. Bostic stated he believes a cut in the federal funds rate may happen in the fourth quarter of this year. The Fed's target for inflation remains at 2%, and the current rate sits at a 20-year high of 5.25%-5.5%.

Key Takeaways

✔️

One potential interest rate cut expected in Q4 2024.

✔️

Bostic emphasizes careful monitoring of inflation trends.

✔️

Current inflation rates are at a 20-year high.

✔️

Fed's long-term inflation target remains at 2%.

"Taking all the circumstances into account, I continue to believe conditions will likely call for a cut in the federal funds rate in the fourth quarter of this year."

Bostic shares his outlook for interest rates with careful consideration of current economic conditions.

"There are plausible scenarios in which more cuts, no cuts, or even a raise could be appropriate."

Bostic underscores the need for flexibility based on economic data as he assesses future rate decisions.

Bostic's insights reflect a cautious optimism regarding inflation trends. His belief in a likely rate cut suggests a response to improved economic indicators, though remains sensitive to changing conditions. This approach indicates a shift towards accommodating economic growth, while still keeping a close eye on inflation targets. Monitoring of labor market changes will be crucial as the Fed balances its strategy going forward.