Investing.com – Atlanta Federal Reserve Bank President Rafael Bostic expressed concern on Wednesday about the pace of inflation and noted that he does not believe rate cuts should take place before the fourth quarter of this year.
In an interview with CNBC, the central bank official said that strong productivity, a recovery in the supply chain and a resilient labor market suggest that inflation will fall “much more slowly than many expected.”
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Bostic’s comments come as other Fed officials also signal a desire to move cautiously on interest rate cuts. They noted that the strong economy as well as moderate inflation gives them time to see more evidence that inflation is returning to the central bank’s 2% target.
However, members of the Federal Open Market Committee, of which Bostic is a voting member, indicated last month that they expect three cuts to come this year.
Bostic sees only one interest rate cut this year, in the fourth quarter of the current year 2024, as his expectations indicate that he is one of the most stringent members of the committee responsible for setting the interest rate. Markets expect the Fed to start cutting interest rates in June or July. The probability changed on Wednesday morning, with the market probability of a June cut falling to 54%, down about 10 percentage points from the previous day, according to .
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During an interview on Wednesday, Bostic noted that his views on inflation and interest rates have fluctuated. “It’s going to be a bumpy road, and I think if you look at the last few months, inflation hasn’t moved much compared to where we were at the end of 2023,” he said. Pointing out that there were some numbers in the inflation data that made him feel a little concerned that things might move more slowly.
Most metrics tracked by the Atlanta Fed show inflation exceeding 3%. Its own measure of “flat” inflation showed the 12-month rate at 4.4% in February.
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