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Fed Chairman: Lowering interest rates too soon could be ‘quite disruptive’

A CUP IN 2024

Powell spoke shortly after Atlanta Fed President Raphael Bostic, who also sits on the central bank’s rate-setting committee, told CNBC that he now believes policymakers will not are expected to make only one rate cut this year, during the last quarter of 2024.

Bostic has questioned the timing of budget cuts in recent months, moving from expressing reservations about anticipated cuts to expressing cautious support for implementing them by summer.

But the first months of the year were marked by a slight rise in inflation, while the economy and the labor market showed signs of resilience, leading it to once again modify its perspectives.

“I’m back to where I was before, because we’ve seen inflation get a lot bumpier in its path,” said Bostic, one of 12 policymakers on the 19-person committee who will vote on monetary policy. this month. year.

“We’re just going to have to watch and wait to see how things develop,” he added.

If the economy continues to grow as expected, Bostic said it would be “appropriate” for the Fed to begin cutting rates in the final quarter of this year.

“I currently think inflation will gradually decline over the course of 2024,” he said, adding that he did not expect the Fed to reach its long-term goal of 2%. before the start of 2026.

“I think we have time to be patient, and we can just watch the economy and see if that’s how things are actually playing out,” he said.

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