MNI BRIEF: Bostic Says Fed Not In Rush To Cut To Neutral

MNI (WASHINGTON) - Atlanta Federal Reserve President Raphael Bostic said Friday the central bank is in no rush to lower interest rates to a more neutral stance, citing a robust labor market and still-declining inflation. 

Bostic said he expects inflation to converge to 2% next year and noted "labor markets are strong. They're a little weaker than they were a year ago, but they're not weak." He repeated he sees the neutral rate somewhere in a range between 3% and 3.5% and showed support for a patient approach to setting the policy rate. "We are not in a rush to neutral," he told the Mississippi Council on Economic Education Forum. 

"In my outlook, interest rates will continue to fall," he told students. "I can't promise a particular timetable or trajectory for this, but if the economy continues with all of this, if inflation continues to fall, labor markets remain robust and we still see positive production, we'll be able to continue on the path back to neutral." (See: MNI POLICY: Fed To Scale Back To 25BP As US Outlook Stays Rosy)