Fed officials stick to cautious language, but rate cut seems likely

Federal Reserve Bank of Atlanta President Raphael Bostic appeared late Thursday alluding towards the possibility of late-2024 rate cuts, but cautioned the need for patience on interest rates.

Key Remarks By Bostic

I am pleased with inflation progress in April but the Fed is not yet there. The Fed has to be patient and vigilant.

There is still a lot of pricing pressure in the economy.

I am hearing businesses say they are at the limits of pricing power and not able to fully pass-through input costs.

Firms can’t 100% pass through prices, the economy is slowing.

It could be appropriate to reduce rates toward year end.

My outlook right now is for continued fall in inflation, which would make appropriate to reduce rates later in the year, but nothing not locked in.

I expect inflation to fall slowly, continued economic momentum.

I have to be open to a broad range of possibilities, with a number of different scenarios that could play out.