(Bloomberg) — Federal Reserve Bank of Atlanta President Raphael Bostic said he’s comfortable keeping interest rates steady, reiterating he doesn’t think it will be appropriate to lower borrowing costs until toward the end of the year.
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Bostic said he still believes inflation is on the path to the central bank’s 2% goal, but he noted that path is likely to be slower than people expect. The Atlanta Fed chief has previously said he anticipates just one rate reduction this year.
“Inflation is high — it’s too high — and we need to get it to our 2% target,” Bostic said Thursday in Fort Lauderdale, Florida. “I’m comfortable being patient.”
Bostic, who votes on monetary policy this year, said he will continue to monitor job growth and inflation-adjusted wage gains.
“Right now, where our stance is — I think is a restrictive stance — it will slow the economy down and eventually get us to 2%,” he said. “But I’m not in a mad-dash hurry to get there if all these other good things are happening.”
Policymakers are poised to keep interest rates at the current level, a two-decade high, after inflation has proved to be stubborn in the first three months of the year. On Tuesday, Fed Chair Jerome Powell said persistent inflation means it will likely take longer than previously thought to gain enough confidence to lower borrowing costs.
Traders now see just one to two rate cuts this year. That’s a far cry from the roughly six they expected at the start of 2024, and the three that Fed officials penciled in just a month ago.
The Atlanta Fed chief said American businesses and consumers are in “much better” shape than is typical in this kind of economic cycle, adding, “I am hopeful that continues.”
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