US Fed's Bostic: "One 0.25% Interest Rate Cut This Year"

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated that the Federal Reserve (Fed) is expected to cut interest rates by 0.25 percentage points once this year.

On the 15th (local time), according to Bloomberg News and others, President Bostic said that although the U.S. economy is expected to slow down this year, it will still remain strong, and there may be some fluctuations in the downward trend of inflation.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta [Photo by AP Yonhap News]

He also predicted that the long-term U.S. benchmark interest rate will fall to about 3 to 3.5%. However, he added that the timing of reaching this level is uncertain. The Fed made a 'big cut' last month by lowering rates by 0.5 percentage points. The current U.S. interest rate is 4.75 to 5%.

President Bostic said, "The question everyone asks us is 'how quickly.' I think it will depend on what happens in the labor market and inflation," adding, "I actually think inflation will be irregular, and employment is expected to remain solid."

However, President Bostic noted that this forecast is not final and can be adjusted as needed when data on inflation and the labor market are released. He said, "We are keeping our options open."

Earlier, on the 10th, President Bostic mentioned the possibility of holding rates steady, saying, "If the indicators are judged to be appropriate, there is absolutely no problem skipping a meeting (without cutting rates)."

Meanwhile, the U.S. gross domestic product (GDP) growth rate is projected to be about 2.6% this year and about 2% next year.