Atlanta Federal Reserve President Raphael Bostic has reportedly indicated that the US economy is likely slowing down, which could prompt interest rate cuts later this year.
Will the Federal Reserve Cut Interest Rates in 2024?
Despite a first quarter in which the speed of price surges seemed to stall well above the Fed's 2% target, Raphael Bostic told Reuters in an interview that he believes lowering interest rates in 2024 is still feasible.
Bostic mentioned that discussions with businesses in his district suggest that wage and job growth are expected to decelerate, with most firms reporting a decline in pricing power after rapid price increases recorded in 2022.
Bostic noted that many employers anticipate returning to pre-pandemic wage growth levels, except for tech companies, and expressed that most businesses feel they've reached their pricing limits.
Read also: Federal Reserve Poised to Cut Interest Rates 6 Times in 2024 as US Economy Slows Down: ING
Federal Reserve on Slowing Inflation
Looking ahead, Raphael Bostic emphasized the need for inflation to slow down gradually to align with the Fed's target of 2%. He noted that although US job growth in April was slightly below expectations, the overall gain of 175,000 positions remained robust.
Being a voting member of the Federal Open Market Committee, Bostic backed the decision to keep the benchmark interest rate stable at 5.25%-5.50% after the July meeting.
He stressed the need for continued moderation in job growth to align more closely with inflation targets, hinting at potential interest rate adjustments as the economy adapts.
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