Fed’s Bostic says he doesn’t see first rate cut until late next year

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The Federal Reserve may not cut interest rates until late 2024, Atlanta Fed President Raphael Bostic said Friday.

In an interview on CNBC, Bostic was asked when the Fed would cut rates.

“When we get really close to 2%,” he replied.

Pressed for a date, Bostic added, “so I would say late 2024.”

Earlier in the interview, Bostic had said he didn’t think the first cut would come before the middle of the year, at the earliest.

“We have to get a lot closer to 2% [inflation target] before I would consider any relaxation of our posture,” he added.

In a speech earlier this month, Bostic said he didn’t think the Fed needed to increase its policy interest rates again in this cycle.

Business is slowing

In the interview, Bostic said that his contacts tell him that an economic slowdown is coming.

“They are seeing their customers start to act in different ways. They expect that where we are today is a lot stronger than where we will be six months from now,” he said.

Asked about the market’s seeming uncertainty over the message from Fed Chairman Jerome Powell’s speech on Thursday, Bostic replied “these are complicated times.”

Inflation is coming down a lot but the broader economy is resilient, he said.

Bostic said he expects a slowdown, but not a recession, and sees inflation returning to 2% target.

U.S. stocks were set to open lower on Friday. Dow Jones Industrial Average futures
YM00,
+0.11%
dropped 67 points, or 0.2% to 33,481. The yield on the 10-year note
BX:TMUBMUSD10Y
was down 4 basis points at 4.944% on Friday, but has surged 31 basis points this week, from 4.616% on Monday.

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