Free Trial

FED: Atlanta's Bostic: Might Be "Waiting For A While" For Rate Cuts

FED

Atlanta Fed President Bostic (non-2025 voter), who has leaned variously dovish and hawkish on the FOMC spectrum in the last couple of years, suggested in a Q&A Monday that the Fed may be "waiting for a while" before easing rates further. "I want to see what the 100 bps we did last year translates to in terms of the economy. Depending on what the data are, it might mean that we are waiting for a while."

  • On rising policy uncertainty: "I had uncertainty on Dec. 31. The amount of uncertainty we have today is greater than that. I want to be cautious and I don't want to have our policy lean in a direction making an assumption our economy is going to evolve a certain way and then I have to turn and unwind. There are a lot of things I have to wait and see about before I feel confident I know which direction policy will go."
  • He says that as of the end of 2024, the labor market was pretty solid, inflation was high but we had taken a lot of policy action to recalibrate it so that when it reached target we would be at a neutral rate. GDP maintained strength and firms were confident 2025 was going to be about the same as 2024.
  • He notes "A lot of moving parts" from policy changes, economists expect tariffs would raise prices but deregulation unleash investment and productivity and put downward pressure on prices. He says that the most important thing we can do right now is ask our business contacts and families what they would do under various scenarios to understand their reaction function.
  • On inflation: My outlook for inflation is to continue falling toward 2% in a bumpy, janky way. Housing is a major factor contributing to stubbornness. Alternate measures are pointing to disinflation but we have to stay on top of why the PCE measure isn't behaving like that.
  • He reiterates that his neutral rate estimate is 3-3.5% area (nominal).
331 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.

Atlanta Fed President Bostic (non-2025 voter), who has leaned variously dovish and hawkish on the FOMC spectrum in the last couple of years, suggested in a Q&A Monday that the Fed may be "waiting for a while" before easing rates further. "I want to see what the 100 bps we did last year translates to in terms of the economy. Depending on what the data are, it might mean that we are waiting for a while."

  • On rising policy uncertainty: "I had uncertainty on Dec. 31. The amount of uncertainty we have today is greater than that. I want to be cautious and I don't want to have our policy lean in a direction making an assumption our economy is going to evolve a certain way and then I have to turn and unwind. There are a lot of things I have to wait and see about before I feel confident I know which direction policy will go."
  • He says that as of the end of 2024, the labor market was pretty solid, inflation was high but we had taken a lot of policy action to recalibrate it so that when it reached target we would be at a neutral rate. GDP maintained strength and firms were confident 2025 was going to be about the same as 2024.
  • He notes "A lot of moving parts" from policy changes, economists expect tariffs would raise prices but deregulation unleash investment and productivity and put downward pressure on prices. He says that the most important thing we can do right now is ask our business contacts and families what they would do under various scenarios to understand their reaction function.
  • On inflation: My outlook for inflation is to continue falling toward 2% in a bumpy, janky way. Housing is a major factor contributing to stubbornness. Alternate measures are pointing to disinflation but we have to stay on top of why the PCE measure isn't behaving like that.
  • He reiterates that his neutral rate estimate is 3-3.5% area (nominal).