Raphael Bostic, the President of the Federal Reserve Bank of Atlanta, stated on Wednesday that the Federal Reserve should not drop its benchmark interest rate until the end of this year.
Bostic also reaffirmed his belief that the United States central bank should only reduce the cost of borrowing money once throughout the course of each year beginning in 2024.
When asked about inflation, Bostic stated, "We've seen inflation kind of become much more bumpy," in an interview with the channel CNBC. "If the economy evolves as I expect and that's going to be seeing continued robustness in GDP and employment, and a slow decline in inflation over the course of the year, I think it will be appropriate for us to start moving down at the end of this year, the fourth quarter."
In spite of the fact that most policymakers are still anticipating at least three rate decreases this year, the Federal Reserve decided to maintain interest rates in the range of 5.25% to 5.5% last month.
However, the Fed's updated projections reflected slower progress on inflation as well as sustained healthy economic growth and employment.
Two additional Federal Reserve policymakers made separate appearances yesterday, and both of them reaffirmed their projections for three rate reductions. Later on Wednesday, Federal Reserve Chair Jerome Powell is scheduled to deliver a speech.
The concerns that Bostic has regarding the fact that several secondary measures in the inflation data are significantly higher than they were in the past were once again brought to light. Bostic stated that any weakness in the economy was incremental or gradual.
The Fed's objective measure of inflation was 2.5% in February, which is significantly lower than its top of around 7% in the middle of 2022 but is still more than the 2% goal. Progress has been slower so far this year than it was for a significant portion of the current year.
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