Atlanta Fed President calls for caution

Atlanta Fed President Raphael Bostic urged the U.S. central bank to be cautious about overtightening monetary policy as inflation continues to ease. “We’ve made significant progress in the fight. Inflation is well off the highs we saw last year. And the latest numbers are encouraging in ways that suggest we could see continued declines,” Bostic said at a news conference on Tuesday. Bostic, who is not a voter on the central bank’s interest rate-setting Federal Open Market Committee this year, said he doesn’t think there will be a rate cut until the second half of 2024 at the earliest, given today’s outlook. The Atlanta Fed chief said he would likely “reluctantly” support last week’s rate hike if he were a voter. The Fed raised its benchmark interest rate by a quarter point to a range of 5.25% to 5.5% at its July 25-26 meeting, the highest level in 22 years. “Things to date seem to be playing out in a way that’s consistent with the notion of an orderly slowdown, which is very promising,” Bostic said. "From a policy perspective, I think all of these facts warrant caution, patience and determination. Bostic said his fundamental outlook has not changed, but the Fed will receive a lot of additional data through September and could change its view for that meeting if the data comes back contrary to expectations."