MNI BRIEF: Fed's Bostic Repeats Preference For 1 Cut This Year
Atlanta Fed President sees neutral rate between 3-3.5%.
Federal Reserve Bank of Atlanta President Raphael Bostic Tuesday said he sees the need for one more interest rate cut this year but is remaining open to a cut in November.
"I'm keeping my eyes open. I'm keeping my options open," Bostic said in a moderated discussion. "I'm allowed to have information inform me moving forward and that's what I'm going to do. The data for much of this year, inflation has gone faster than I expected. If that continues, I'll be comfortable doing another 25 but the data will tell me that."
"My outlook is for our long-run average policy rate should be somewhere in the 3%-3.5% level," he said. "My expectation is that we're going to get to that level. The question everyone asks is, how fast? It depends on what happens in labor markets and what happens with inflation. If inflation falls faster than I expect, then I'll be comfortable moving us faster than I expect, and if the labor market weakens more than I expect, that will also accelerate it. But I actually think we're going to see inflation be choppy and I expect that we'll see employment stay robust." (See: MNI INTERVIEW: More Cuts Before Fed Fine-Tunes Neutral - Mester)