Atlanta Fed’s Bostic Says He Doesn't See Rate Cut This Year

Federal Reserve

Kevin Dietsch / Staff / Getty Images

Key Takeaways

  • Atlanta Fed President Raphael Bostic said he doesn't see an interest rate cut this year, even with a recession.
  • Chicago Fed President Austan Goolsbee said the Fed must lower inflation without causing recession.
  • Minneapolis Fed President Neel Kashkari warned not to be "fooled" by recent data on inflation.

Federal Reserve Bank of Atlanta President Raphael Bostic said inflation remains too high, and he doesn’t expect the Fed to cut interest rates this year, even if there is a recession.

Bostic told CNBC on Monday that policymakers won’t be thinking about rate cuts “until well into 2024,” and indicated he thinks a rate hike would be more likely at this point.

However, Bostic explained that the appropriate policy is to now wait to see how much the Fed’s previous moves, which raised rates 10 times since  March 2022, will impact the economy.

Chicago Fed President Austan Goolsbee, also on CNBC, said the full impact of Fed actions have yet to be felt, and that it’s important to get inflation “back to the correct path” without causing a recession. He noted that he is taking a more cautious approach to policymaking amid a time of high uncertainty. Goolsbee indicated he would be watching credit stresses, debt ceiling negotiations, the labor market, and prices ahead of the Fed’s next meeting in June.

Minneapolis Fed President Neel Kashkari said at an event in St. Paul that even though consumer prices edged down in April, “We should not be fooled by a few months of positive data." He added “we need to finish the job” in bringing down inflation. 

Markets were pricing in an over 75% chance that the Fed would not raise interest rates at its next meeting in June, according to fed funds futures data collected by CME Group.

Target Rate Probabilities for the Fed's June Meeting as of May 15, 2023

CME Group

Article Sources
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  1. CNBC. “Fed’s Bostic casts doubt on rate cuts this year even if there’s a recession.”

  2. CNBC. “Chicago Fed President Austan Goolsbee: Rate hikes effects still in the pipeline.”

  3. Federal Reserve Bank of Minneapolis. “Neel Kashkari Q&A at the Minnesota Transportation Conference & EXPO.”

  4. CME Group. “CME FedWatch Tool.”

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