The president of the Federal Reserve Bank of Atlanta, Raphael Bostic, told CNBC on Wednesday that he expects the US central bank to lower the official interest rate just once this year.
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“The economy maintains the strong momentum it has had.”
“If there is any weakening, it is at a very incremental level.”
“In the long term, the economy must slow down to reach its potential.”
“I believe that growth can still be achieved and inflation continues to fall.”
“But in that environment, inflation would fall much more slowly than expected.”
“That's partly why I changed my forecast, as the Fed would have to be more patient than expected.”
“I still expect a rate cut this year.”
“We're going to have to watch and wait to see how things develop.”
“If the economy develops as I expect, I think it is appropriate to cut rates in the fourth quarter of this year.”
“My outlook right now is that inflation will decline incrementally through 2024.”
“I think we won't get back to the 2% inflation target until 2026.”
“The road is going to be full of potholes, in recent months inflation has not moved much in relation to 2023.”
“I am in no rush to alter the dynamics of the economy as long as inflation moves toward our target rate.”
“That said, if employment starts to deteriorate I would have to take that into account.”
“However, my contacts do not give me any concerns about employment.”
Market reaction
The US Dollar Index did not immediately react to these comments and lost 0.04% on the day, standing at 104.70 points.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
