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Yahoo
a day ago
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Fed's Bostic hints at rate cut in 2025, markets respond
Fed's Bostic hints at rate cut in 2025, markets respond originally appeared on TheStreet. The Federal Reserve Bank of Atlanta President and CEO Raphael Bostic said he is open to the possibility of a single cut in interest rates sometime later this year. The crypto market remained rather dull and didn't have a strong reaction to the Fed member's comment. The total crypto market cap stood at $3.32 trillion at the time of writing, up 1.8% a day. As per Kraken, Bitcoin was trading at $105,277.65 at press time, up 1.3% a day. Bostic, however, added that he was in no hurry to adjust "our policy stance." He continued: I continue to believe the best approach for monetary policy is patience. Bostic said that he had hinted at a single rate cut for 2025 while releasing the central bank forecasts in March, and he still thinks it is a possibility. But a lot will depend on "how the uncertainty resolves itself," he added. The uncertainty Bostic referred to was the one arising from President Donald Trump's aggressive tariff policy. The banker said the Fed will have to wait and see how the heightened uncertainty affects jobs and prices. As of now, the inflation still remains above the Fed's target of 2%, Bostic underlined. Earlier, Fed Chair Jerome Powell also reiterated the bank's commitment to meeting the 2% inflation target. Bostic said he is "very cautious about jumping to cuts at this point." Note that the next Federal Open Market Committee (FOMC) meeting will be on June 17-18, in which Bostic doesn't hold a vote this year. The crypto market, earlier insulated from broader macroeconomic trends such as interest rate cuts, is now known to react sharply to such Fed decisions. A potential rate cut in the future is expected to send the crypto market soaring. Fed's Bostic hints at rate cut in 2025, markets respond first appeared on TheStreet on Jun 3, 2025 This story was originally reported by TheStreet on Jun 3, 2025, where it first appeared.
Business Times
21-05-2025
- Business
- Business Times
Fed officials expect tariffs to boost prices; White House downplays risk
[AMELIA ISLAND, Florida] Federal Reserve officials said on Tuesday (May 20) that higher prices are coming on the back of rising US import tariffs and counselled patience before making any interest rate decisions before it is clear whether the inflation shock will be fleeting or more persistent. 'One thing that we have heard is that a lot of the tariff impact to date has actually not shown up in the numbers yet. There's been a lot of front-running, building inventories and all those sorts of things. And we are hearing from an increasing number of businesses that those strategies ... are starting to run their course,' Atlanta Fed president Raphael Bostic said on the sidelines of a conference in Florida. 'If these pre-tariff strategies have run their course, we are about to see some changes in prices, and then we are going to learn how consumers are going to respond to that,' said Bostic, who now expects the US central bank will have to wait longer for clarity about the economy's direction and make any changes to interest rates. 'We should wait and see where the economy is going before we do anything definitive,' said Bostic, who anticipates only a single quarter-percentage-point cut in the Fed's policy rate this year and several months on the sidelines waiting for the effect of Trump administration policies to become clear. 'I think the best action we can take is to sit on our hands and really carefully go through the data, engage with our communities, hear what they are thinking about, hear about the choices that they are making, and see how that all comes together,' Cleveland Fed president Beth Hammack said at an Atlanta Fed event. Her comments were echoed by San Francisco Fed president Mary Daly in a joint appearance. So far the main impact appears to be in sentiment surveys showing households and businesses are less confident about the economic horizon and expect higher inflation. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In an interview on Bloomberg Television on Tuesday, Stephen Miran, who chairs the White House's Council of Economic Advisers, pushed back on the idea that the tariffs imposed by the administration so far and potentially added in coming weeks would result in meaningful inflation. 'We have been introducing tariffs since day one of this administration,' Miran said, yet there has 'been no real meaningful effect on inflation', with recent consumer price index reports coming in weaker than expected. But Fed officials and analysts say they expect the impact has just not filtered through yet to the economy. Walmart, the world's largest retailer and a major importer of goods from China, said last week that price increases were on the way, comments that drew a rebuff from US President Donald Trump. 'We can control what we can control,' Walmart CEO Doug McMillon said during the company's quarterly earnings call. Even trimming the tariffs on Chinese goods to 30 per cent, as the administration recently did in backing off a more exorbitant 145 per cent levy, 'will result in higher prices', he said. Inflation expectations The waiting game for Fed officials may prove a long one. The central bank has kept its policy rate in the current 4.25 to 4.5 per cent range since December, but says it will remain difficult to anticipate where the economy is heading until the tariff issue and other policies are settled for good – and enough time lapses after that to gauge the impact. In comments to the Economic Club of Minnesota on Tuesday, St Louis Fed president Alberto Musalem said the central bank needed to guard first and foremost against a rise in inflation expectations, and key to that effort will be assessing if coming price hikes seem like one-time increases or risk turning into something more persistent. The tariff plans may have been scaled back, but still 'seem likely to have a significant impact on the near-term economic outlook', Musalem said, with 'direct one-off effects on the prices of imported final goods, indirect effects on the prices of domestically produced goods and services, and possibly second-round effects on inflation'. Deciding in advance that the effects will fade on their own, 'runs the risk of underestimating the level and persistence', and creating more inflation trouble in the future, he said. REUTERS
Yahoo
20-05-2025
- Business
- Yahoo
Fed Officials Throw Cold Water On Hopes of a Summer Interest Rate Cut
The Federal Reserve is not likely to cut interest rates at its next two meetings in June and July, central officials said in interviews this week. The Fed has kept interest rates at a higher-than-usual level this year as it waits to see how President Donald Trump's tariffs will affect the economy. A weakening job market could push the Fed to lower rates, while surging inflation could force it to keep rates high. Tariffs could worsen both problems, posing a dilemma for the for when the Fed will cut interest rates keep getting kicked down the road. Several bank policymakers indicated in speeches and interviews this week that the Federal Reserve is unlikely to lower its key fed funds rate at its two meetings this summer. As of Tuesday afternoon, there was a 71% chance the Fed would keep its interest rates steady through its next two meetings, according to the CME Group's FedWatch tool. The predictions of the Fed's next moves are calculated based on fed fund futures trading data. That's a sharp reversal of expectations. As recently as a month ago, markets were pricing in more than a 90% chance of a rate cut by July. In an interview on MSNBC on Monday, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said he favored waiting at least through the end of the summer before making any monetary policy moves."There's a lot of uncertainty. I think we'll have to wait three to six months to start to see where this settles out," Bostic Bostic is not a voting member of the Federal Open Market Committee that decides interest rates, non-voting members speak at the Fed's policy meetings and can influence the outcome by participating in C. Williams, president of the Federal Reserve Bank of New York, laid out a similar timeline Monday when speaking at a conference of the Mortgage Bankers Association, Bloomberg reported.'It's not going to be that in June we're going to understand what's happening here, or in July,' Williams said, according to Bloomberg. 'It's going to be a process of collecting data, getting a better picture, and watching things as they develop.' Fed officials have indicated they're in the same boat as everyone else: uncertain of how President Donald Trump's tariff policies will change in the coming months, and how the economy will react to radically higher import taxes. Amid the fog of uncertainty, Fed officials have said the best move is to wait and see what happens. That attitude, repeated by multiple officials in speeches and interviews this week, has quashed expectations the Fed would resume the series of rate cuts it started late last year, putting downward pressure on borrowing costs for credit cards, car loans, and other officials must decide whether to keep the Fed funds rate high to smother the last embers of the post-pandemic inflation flare-up or cut rates to bolster the economy and prevent a surge in unemployment. Economic forecasts anticipate the tariffs will worsen both problems, potentially leaving the Fed in a addition, the White House has cracked down on immigration, Congress is working on a significant overhaul of the tax code, and federal regulators have relaxed rules on businesses—all developments with unknown effects on the economy. Alberto Musalem, president of the Federal Reserve Bank of St. Louis, became the latest official to repeat the "wait and see" mantra Tuesday when he spoke at the Economic Club of Minnesota. "The range of possible economic outcomes for the next few quarters is wide," said Alberto Musalem, president of the Federal Reserve Bank of St. Louis at the Economic Club of Minnesota Tuesday. "Major new trade, immigration, fiscal and regulatory policies could have a material impact on the economy in different ways and at different time horizons. As we get more clarity on these policies, the macroeconomic and monetary policy implications should become more evident." Read the original article on Investopedia
Yahoo
19-05-2025
- Business
- Yahoo
Fed's Bostic Sees One Cut in 2025 Amid Lengthy Tariff Talks
(Bloomberg) -- Federal Reserve Bank of Atlanta President Raphael Bostic repeated that he sees the central bank delivering one interest-rate cut this year amid tariff-induced uncertainty. America, 'Nation of Porches' NJ Transit Train Engineers Strike, Disrupting Travel to NYC NYC Commuters Brace for Chaos as NJ Transit Strike Looms NJ Transit Makes Deal With Engineers, Ending Three-Day Strike But, he added, a faster-than-expected resolution to some of the Trump administration's ongoing trade negotiations could mean the Fed can act earlier. 'If it takes negotiations a long time to settle things out — we have another 90 days on China, for example — that starts to push much further into the summer, in which case we won't actually know what the true effects are going to be for several months after that,' Bostic said Monday in an interview with Bloomberg Television on the sidelines of his bank's 2025 Financial Markets Conference in Fernandina Beach, Florida. But there's also the possibility that trade discussions are resolved more quickly and tariff rates come in lower than forecast, he said. 'In that case we may be able to pull forward some of our actions, because there may not be as much that we need to do in terms of managing the price level,' he said. Bostic said the Fed can't act in the current environment in which consumers and businesses have halted big spending decisions as they wait to see how tariff negotiations play out. Most Fed officials have said interest rates are well positioned for the central bank to wait and see how the economy reacts to new levies. Bostic called the current policy setting 'mildly restrictive,' meaning it's weighing a bit on economic activity. Fed officials have kept rates on hold this year after cutting them by a full percentage point in the last three months of 2024 as they try to further cool inflation. Why Apple Still Hasn't Cracked AI Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp Anthropic Is Trying to Win the AI Race Without Losing Its Soul DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
19-05-2025
- Business
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A top Fed official sees just one interest rate cut this year
A top Federal Reserve official said Monday that believes the central bank should cut interest rates once in 2025 and then sit tight to assess the fallout of President Donald Trump's tariffs on the U.S. economy. 'I'm leaning much more into one cut this year because I think it will take time, and then we'll sort of have to see,' Federal Reserve Bank of Atlanta President Raphael Bostic said on CNBC's 'Squawkbox.' He offered one optimistic scenario in which trade deals are quickly negotiated that lead to a steady unwinding of tariffs which kicked in last month. 'In that case, you'd see the economy rebound much faster than it would otherwise,' Bostic said, while noting any outcome was hard to predict in the current environment. He added it would take up to six months to fully gauge how tariffs affect the economic landscape and determine whether more action from the Federal Reserve was necessary. The Fed is charged with the dual responsibilities of keeping inflation low and maximizing employment through its control of interest rates. It recently decided to keep interest rates unchanged at its current level of 4.25 percent to 4.5 percent. Bostic previously said he believed the Fed would cut interest rates twice in 2025, but his latest comments signal a more cautious approach. While Bostic takes part in the Federal Open Monetary Policy committee meetings assessing the economy, he doesn't cast a vote in setting interest rates. A wave of tariffs imposed by President Donald Trump on nearly every country has sent tremors through the U.S. economy. A closely-watched consumer sentiment index dropped for the fifth month in a row, reaching its second lowest-level ever as Americans increasingly worry about the future of their pocketbooks. Atlanta Federal Reserve data shows that year-ahead inflation expectations from private firms have ticked upward 0.3%, reaching 2.8%. 'I worry a lot about the inflation side. Mainly because we're seeing expectations move in a troublesome way,' Bostic said on CNBC (CMCSA). For the latest news, Facebook, Twitter and Instagram.
