Interest rate message from 2 regional Fed Presidents

Atlanta Fed President Bostic said rate cuts could begin in the third quarter. Chicago Fed President Austan Goolsbee said it was too early to declare victory on inflation and that any decision to cut rates would depend on data. Atlanta Federal Reserve President Raphael Bostic said the U.S. central bank could start cutting rates “in the third quarter” of 2024 if inflation slows as expected, backing away from expectations of an imminent move but outlining a negotiating process that could gain momentum in the period ahead. Bostic said he expects inflation as measured by the personal consumption expenditures (PCE) price index to finish 2024 around 2.4%, enough progress toward the Fed’s 2% goal to warrant two quarter-point rate cuts in the second half of the year. “I don’t think that’s going to happen anytime soon,” Bostic said in the interview, adding that policymakers still need “a few months” to gather enough data and confidence that inflation will continue to fall before moving away from the policy rate. Chicago Fed President issues cautious interest rate message According to Chicago Fed President Austan Goolsbee, it is too early to declare victory in inflation and interest rate cut decisions will depend on the upcoming data. Goolsbee, who was a guest on the Face the Nation program on the US CBS channel on Sunday, said, “We made significant progress in 2023, but we are not yet at the end. What will happen to interest rates will be determined by the data.” Stating that they need to reduce inflation to the target, Goolsbee said, “We should not roll up our sleeves without seeing the stream until we are convinced that we are on the path to reach the target.” Fed members’ expectations for a 2024 interest rate cut and Chairman Jerome Powell’s statement that they discussed interest rate cuts at the meeting led to a rally in the markets. The Fed members who spoke afterwards gave cautious messages, with New York Fed President John Williams stating that the interest rate cut would be “premature” in March and saying, “We haven’t really talked about interest rate cuts.”