Fed should leave interest rates unchanged for the rest of the year, Bostic says

Atlanta Federal Reserve President Raphael Bostic on Wednesday says his baseline view is that the central bank should keep interest rates steady for the rest of the year and not cut them until well into 2024.

“My baseline is that we stay at this level for the rest of the year,” Bostic said, in an interview with Yahoo Finance. Bostic is one of only two of 18 Fed officials who did not pencil in an additional rate hike this year. Twelve of 18 Fed officials have forecast two 25 basis point hikes in the Fed funds rate over the next six months.

“I feel we have a little bit of time to play out and see exactly how much the economy is responding to our policy,” Bostic added.Fed Chair Jerome Powell said Wednesday that two more 25 basis point rate hikes this year was a “good guess” if the economy performs as expected.Bostic said he was open to changing his mind, especially if the economy does not slow down.

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