Investors will have to wait until at least July for those widely expected interest-rate cuts, according to one Federal Reserve president\u2019s outlook.<\/p>\n
Atlanta Fed President Raphael Bostic said rate cuts probably wouldn\u2019t be suitable until the third quarter given the current strength of the economy.\u00a0<\/p>\n
That\u2019s a quarter earlier than he originally predicted, Bostic said, thanks to just how quickly inflation is slowing. Bostic added that he is anticipating two rate cuts in 2024.\u00a0<\/p>\n
\u201cIf inflation continues going down faster than I expected, then I\u2019ll adjust and adapt,\u201d Bostic said, speaking to the Money Marketeers of New York University. \u201cBut I want to be sure\u2026 that we\u2019re getting true signals, as opposed to volatility.\u201d\u00a0<\/p>\n
He said the course of the inflation rate over the year is likely to be \u201cdirectionally the same but bumpy.\u201d<\/p>\n
Bostic, who is voting on the Federal Open Market Committee\u2019s policy decisions this year, said he is \u201cgrateful\u201d the economy has maintained strong growth and a robust labor market even as the inflation rate falls.<\/p>\n
Yet he said he remains \u201cvigilant\u201d over the risk of cutting rates too soon and spurring a re-acceleration in inflation.<\/p>\n
\u201cThe stronger the economy is, the harder it\u2019s going for prices to fall rapidly,\u201d he said. \u201cI do think that in the set of [potential] problems to have, this is one of the better ones.\u201d\u00a0<\/p>\n
Inflation eased in January<\/a> but came in above Wall Street Bostic echoed Fed Chair Jerome Powell\u2019s previous public comments that officials will need to see more evidence that inflation is under control before they move to cut rates, especially given the CPI report.\u00a0<\/p>\n He added that bringing the inflation rate down to the Fed\u2019s 2% target remains the top priority.<\/p>\n \u201cThat\u2019s got to be job number one. I don\u2019t want to make this too complicated,\u201d he said. \u201cI worry we underestimate the cost and the pain that high inflation imposes on people.\u201d<\/p>\n He also warned against relying on assumptions drawn from the past history when trying to plot the course for 2024. Current conditions defy prior conventions of how monetary policy affects the economy, he said.\u00a0\u00a0<\/p>\n \u201cEconomic history does not seem to be repeating itself,\u201d he said. \u201cIf there is an overarching lesson I\u2019ve taken from the pandemic experience, it is humility: to expect to be surprised.\u201d<\/p>\n<\/p><\/div>\n<\/div>\n
\n DJIA<\/a>
\n expectations, with consumer prices up 3.1% from the same month a year earlier. That higher-than-expected reading jolted the markets<\/a> Tuesday and dashed investors\u2019 hopes that officials could start cutting interest rates as early as the next Fed meeting in March.<\/p>\n