Atlanta Fed President Bostic: Interest rates may start to decline in the fourth quarter of this year

Atlanta Fed President Bostic said that the federal funds rate may be lowered in the fourth quarter of this year, emphasizing that future policy decisions will be data-driven. Bostic predicted five rate cuts for 2025. However, this outlook is not set in stone, as policymakers acknowledge the unpredictability of the current economic environment, meaning that rate cuts, maintaining rates, or rate hikes are all possible depending on the evolving circumstances. Bostic stated, "In some reasonable scenarios, more rate cuts, no cuts, or even rate hikes are possible. I will let actual data and conditions guide me." He also emphasized the commitment to lowering the inflation rate to the 2% target, which is seen as crucial for widespread prosperity and effective decision-making between households and businesses. Achieving this goal does not mean lowering prices to pre-2021 levels, but aims to create an economic environment where inflation does not significantly affect consumer and producer sentiment. Bostic also pointed out the need to look beyond surface numbers, as despite many aspects of life returning to normal, the economy is still significantly impacted by the COVID-19 pandemic. Even in the case of a tightening of aggressive monetary policy, the effects of policy measures to address the pandemic have supported the labor market and the broader economy