Atlanta Federal Reserve Bank President Rafael Bostick believes the US central bank will cut its benchmark rate just once this year. He explained that while the economy is experiencing strong momentum, there may be a gradual weakening in the future. Bostic believes that slowing down the economy is necessary for it to reach its long-term potential, but still expects growth and inflation to continue at a slower pace than anticipated.

Bostic emphasized the need for patience in this environment as inflation is likely to decrease at a slower rate than expected. He revised his forecast to include only one rate cut this year, with a potential cut in the fourth quarter if the economy develops as he anticipates. Bostic predicts that inflation will gradually decrease until 2024 and may not reach the 2% target until 2026.

Despite some bumps ahead, Bostic does not want to disrupt the economy’s dynamics as long as inflation moves towards the target rate. However, he mentioned that any reduction in employment should be taken into account. Nevertheless, his contacts did not express any concerns about employment.

The market did not react immediately to Bostic’s comments, with the US dollar index losing just 0.04% on the day to 104.70. Overall, Bostić’s cautious outlook and forecast for a one-time interest rate cut this year suggest a measured approach to monetary policy in response to changing economic conditions.

In summary, Atlanta Federal Reserve Bank President Rafael Bostick has expressed his view that the US central bank will cut its benchmark rate only once this year due to strong economic momentum and a potential gradual weakening in the future. He believes that slowing down the economy is necessary for it to reach its long-term potential while still expecting growth and inflation to continue at a slower pace than anticipated.

By Samantha Johnson

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