Summary
- Bostic, known as a hawk, predicted that the rate cut this year would be once, not twice.
- President Bostic stated that inflation is progressing irregularly, necessitating an adjustment in the policy path.
- He mentioned the possibility of negative impacts on investment sentiment and employment due to tariff uncertainty.
'Hawkish' Bostic "Inflation Still Unstable"
Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, known as a 'hawk' (preference for monetary tightening), predicted that this year's rate cut would be limited to just one instance, not two.
In an interview with Bloomberg TV on the 24th (local time), President Bostic stated, "Inflation is very irregular, and it doesn't seem to be clearly moving towards the 2% target, so I've adjusted this year's rate cut to just once." He added, "Because that (inflation easing) is being delayed, I think the policy path should also be delayed."
He pointed out that tariff uncertainty is making economic forecasting more difficult. He noted that if many tariffs are introduced, it would add upward risk to inflation, and increased layoffs and weakened investment sentiment would pose downside risks to employment. Therefore, he said he would wait until the changed policy is implemented before making further adjustments to the forecast.
This statement came about a month after President Bostic mentioned that two rate cuts would be necessary this year. On the 20th of last month, President Bostic stated, "The basic expectation is that there will be two 0.25% point cuts this year."
Reporter Sangmi Ahn saramin@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
