Possibly only one Fed rate cut this year, says director
The US Federal Reserve may only cut interest rates once this year. That’s according to Raphael Bostic, the president of the Fed in Atlanta. That reduction will probably come later than he previously expected.
Last month, Bostic was counting on two interest rate cuts this year, the first as far as he is concerned would be sometime in the summer. He also said that there should be no haste with interest rate cuts.
Bostic now reports that he is less confident that inflation will move towards the two percent target for an extended period of time. He points out some disturbing things. Inflation has actually risen slightly in recent months.
The Fed decided on Wednesday to leave interest rates unchanged at the current high level. Policymakers indicated that they expect an interest rate cut this year in three steps. Fed Chairman Jerome Powell said inflation is “still too high.” But he did call it “likely that rates will be cut sometime this year.”
The Federal Reserve (FED), the central bank of the United States, plays an important role in determining monetary policy in America. These policies have a major impact on both the American and global economies. The first interest rate cut by the ECB is expected in June. But as the FED shows, interest rate cuts are not a certainty in the current economic climate.
