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Fed's Bostic says he is in no rush to get rates down to neutral
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Fed's Bostic says he is in no rush to get rates down to neutral
Oct 18, 2024 11:30 AM

(Reuters) - Atlanta Federal Reserve Bank President Raphael Bostic said Friday he will be patient on cutting rates to make sure inflation does not stall out above the U.S. central bank's 2% target.     "I'm not in a rush to get anywhere," Bostic told the Mississippi Council on Economic Education Forum on American Enterprise in Jackson, Mississippi. "We must get inflation back to our 2% target; I don't want us to get to a place where inflation stalls out because we haven't been restrictive for long enough, so I'm going to be patient, and we're going to let the data show us how inflation proceeds, how employment proceeds."

Bostic said he thinks the Fed's policy rate, now in the 4.75%-5.00% range, should probably be down around the 3%-3.5% range near the end of 2025, where it would neither stimulate or restrict economic growth.

That's also the timeframe for when he expects inflation, by the Fed's preferred measure now at 2.2%, to have reached the Fed's target. 

The Fed reduced its policy rate by a bigger-than-expected half-of-a-percentage point last month, and Bostic has said he expects only a single quarter-point cut over the last two Fed meetings of the year.

That initial half-point cut, Bostic said on Friday, positions the Fed for any eventuality.    

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