Atlanta Fed President Raphael Bostic believes that the risk of inflation makes it necessary to hold the federal funds rate steady for the rest of the year. The Fed voted 11-1 to cut rates by 25 bps last week, with Fed Governor Stephen Miran dissenting in favor of a 50 bps reduction.
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“I am concerned about the inflation that has been too high for a long time,” Bostic said in an interview with the Wall Street Journal on Monday. “And so I today would not be moving or in favor of it, but we’ll see what happens.”
Fed’s Bostic Flags Jobs Uncertainty, Expects Unemployment Rate to Rise
Bostic added that he penciled in only one rate cut for 2025, which includes the recent cut. He believes that the Fed’s long-term goal of 2% inflation will be achieved by 2028, with inflation coming in at 2.9% by the end of 2025.
As for the labor market, Bostic said it carries a “fair amount of uncertainty,” although it isn’t in a crisis. However, he expects the unemployment rate to rise to 4.5% by December, up from 4.3% in August.
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