Atlanta’s president of the Federal Reserve, Raphael Bostic, said on Tuesday that the strong economy, while remaining open to the possibility of a single interest rate cut at some point this year.
“I still believe that the best approach to monetary policy is patience,” Bostic said in a rehearsal released by his regional Fed bank. In a “widely healthy” economy, “we have room to wait and see how increased uncertainty affects employment and prices. Therefore, I’m not in a hurry to adjust our monetary policy posture.”
Speaking of reporters in a teleconference, Bostic noted that in the Central Bank forecasts released in March, he had foreseen a single interest rate cut for this year. “I still think there is room for it, and much of it will depend on how uncertainty will be resolved,” he said.
But Bostic also noted during the interview that inflation is still above the target of 2% of the Fed and that underlying prices are still higher than he would like.
Bostic, who is not entitled to vote at the Central Bank’s federal market committee to define interest this year, said in the rehearsal that the challenges of predicting what is coming in monetary policy are linked to major changes in trade policy. “There is a lot of uncertainty, which makes it quite difficult to predict the economy with confidence.”
The Fed should maintain its reference interest rate in the range of 4.25% to 4.50% in its next monetary policy meeting, on June 17 and 18, while authorities observe the economy to see how it responds to the erratic implementation of a wide range of import tax increases by the Trump administration.
