The Federal Reserve voted again to appoint the “Eagle”: this year it may only cut interest rates by another 25 basis points

Atlanta Federal Reserve Chairman and Federal Reserve FOMC voting committee member Raphael Bostic (Raphael Bostic) said on Tuesday when updating his forecast for the Federal Reserve meeting last month that he expects to cut interest rates only once more this year, by a margin of 25 basis points.

“The median forecast is... to cut interest rates by another 50 basis points, but my prediction is to cut interest rates by another 25 basis points,” Bostic said at an event in Atlanta.

However, Bostic said his predictions are not set in stone; he will make necessary adjustments based on new data on inflation and the job market. “I'm open to my choices,” he said.

He expects the US economy to slow down this year, but will remain strong, adding that the path of downward inflation is likely to show some bumps. Bostic said he expects GDP growth of around 2% in 2025 because households will spend their savings. This year's growth is expected to reach around 2.6%.

The Atlanta Federal Reserve Chairman added that he expects the Fed's benchmark interest rate to fall to around 3% to 3.5% in the long term, but the time to reach this level is uncertain. The current benchmark interest rate is between 4.75% and 5%.

“Everyone asks us the question 'how fast (interest rate cuts) will be. ' I think it depends on the state of the labor market and the state of inflation,” Bostic said during a moderated conversation in Atlanta on Tuesday. “In fact, I think we're going to see inflation unabated, and I expect we'll see employment stay strong.”

Last month, Federal Reserve officials cut borrowing costs by 50 basis points, a larger move than usual to protect the strength of the economy. Later, a strong employment report and higher-than-expected inflation data for September prompted many policymakers to say that the Federal Reserve should cut interest rates more gradually in the future.

Bostic said last week that interest rate cuts should be suspended in November if data supports it, and he is open to keeping interest rates stable at one of the remaining two meetings of the Federal Reserve this year. He confirmed on Tuesday that at last month's meeting, he expected interest rates to be cut by another 25 basis points this year, but the final direction of interest rates will depend on the economy.