(Bloomberg) -- Federal Reserve Bank of Atlanta President Raphael Bostic said he wants to wait “a while” before cutting interest rates again following last year’s reductions amid uncertainty over where the US economy is headed in 2025.
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“I want to see what the 100 basis points of reduction that we did at the end of last year translates to in terms of the economy,” Bostic said Monday during an event organized by the Rotary Club of Atlanta. “Depending on what the data are, it might mean that we are waiting for a while.”
The comments were Bostic’s first public remarks since Fed officials agreed to leave their benchmark interest rate steady last week in a target range of 4.25% to 4.5%. The pause in adjustments followed three reductions late last year that lowered the benchmark by a full percentage point.
Fed Chair Jerome Powell said officials are in no hurry to lower interest rates, pointing to strong economic data and uncertainty over how the US economy and inflation will respond to President Donald Trump’s policies on tariffs, immigration, taxation and regulation. Trump announced over the weekend that he would invoke emergency powers to impose tariffs on Mexico, Canada and China, though on Monday he delayed implementation of the levies against Mexico.
“I had uncertainty on December 31. The amount of uncertainty that we have today is greater than that,” Bostic said during the conversation with his predecessor, former Atlanta Fed President Dennis Lockhart.
Powell said last week officials want to see more progress on inflation and would be looking for “serial readings” showing price pressures moving in the right direction. Subsequent data showed the Fed’s preferred measure of underlying inflation remained muted in December and real incomes were soft, according to a government report released Friday.
Speaking with reporters after the event, Bostic said he didn’t expect to have clarity on the path of inflation by the Fed’s next policy meeting in March. The Atlanta Fed chief also said the central bank’s response to tariffs would depend on whether they have an impact on inflation expectations, echoing comments earlier in the day from his Boston Fed counterpart, Susan Collins.
“There’s a state of play where you might look through the tariff and not have it be a major driver for policy, but again that depends,” Bostic said. “To the extent that were to impact things like inflation expectations, then you’d have to — I think it would be appropriate to respond with policy in some way.”