Fed's Bostic: soft landing hardly assured, expects two quarter-point cuts in 2024
|Atlanta Federal Reserve (Fed) President Raphael Bostic hit newswires on Monday after his quarterly essay was released.
Key highlights
- Soft landing is hardy assured given uncertainty.
- Does not anticipate back-to-back rate cuts when they begin.
- Fed's Bostic still expects two 25-basis point rate cuts in 2024.
- Needs to see more progress and gain confidence on disinflation before voting to reduce policy rates.
- Inflation is on track to return to 2% target, but still too early to claim victory.
- January's hiring was a fresh sign of continued US labor strength.
- Inflation is still widespread, with more than the usual share of items increasing above 5% with trimmed mean stuck at 2.6%.
- Fed still has time to be sure inflation returns to target.
- Fed's Bostic does not see degradation of the US labor market.
- Risks to inflation and employment have balanced out.
- Pent-up exuberance in US economy remains an inflation risk.
- Businesses are not distressed and are ready to invest.
- Services inflation remains higher, may take longer for adjustments to occur.
- Dopes not have a base case for when it might be appropriate to reduce pace of balance sheet decline
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