Latest news with #RaphaelBostic
Yahoo
a day ago
- Business
- Yahoo
The Fed's Word Of The Day: "Uncertainty"
Fed officials on Tuesday once again emphasized their intention to wait and see how President Donald Trump's unpredictable tariff campaign affects the economy before making any monetary policy moves. Three Fed policymakers emphasized uncertainty in separate public remarks. The Fed is widely expected to hold off on cutting the key fed funds rate until at least recent speeches and appearances of policymakers at the Federal Reserve, one word has been a central theme: "uncertainty."Two months after President Donald Trump announced his "Liberation Day" tariffs, Fed officials seem no closer to piercing the fog of the trade war that has kept them from moving the central bank's benchmark interest rate. Three Fed officials who spoke separately on Tuesday emphasized the need for more clarity on trade policy and how the economy will react to the tariffs before making any moves. The officials repeated concerns they've voiced repeatedly in recent months: that the sweeping and frequently changing tariffs could raise prices for consumers and slow the economy. The Fed, which sets the nation's monetary policy, is tasked with keeping inflation under control and employment high, mainly by adjusting its influential fed funds rate, which influences borrowing costs on all kinds of Fed's dilemma is whether to cut the Fed funds rate from its current high level to boost the economy and stave off unemployment or keep it higher for longer to quell inflation that's still running above the Fed's goal of a 2% annual rate. The answer to the impasse, so far, has been to do nothing and see what happens. And so far, neither a resurgence of inflation nor a spike in unemployment has materialized."There is a great deal of uncertainty out there, making it quite difficult to forecast the economy with confidence," Raphael Bostic, president of the Federal Reserve Bank of Atlanta, wrote Tuesday in an essay posted online. "Given that, I continue to believe the best approach for monetary policy is patience. As the economy remains broadly healthy, we have space to wait and see how the heightened uncertainty affects employment and prices."Lisa D. Cook, a governor of the Federal Reserve, made similar comments Tuesday in a speech at the Council on Foreign Relations in New York. "I see the U.S. economy as still being in a solid position, but heightened uncertainty poses risks to both price stability and unemployment," Cook said in prepared remarks. "I will continue to monitor developments closely as I consider monetary policy decisions." Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said before Trump launched his tariff campaign, the economy was headed in the right direction. If those conditions returned, lower interest rates would be in order, he said in a Q&A in Davenport, Iowa. "Where we were coming into April 2 was stable, full employment, with prices coming down to the 2% target, and therefore rates would be a fair bit below where they are today," Goolsbee said. "But with the uncertainty, I can't express that with too much confidence, because who knows if we wake up tomorrow and the tariffs are going back to 50% on the world," he continued. "There's a lot of domestic production that's going to suffer, and we have to figure out how to deal with that."The Fed's strategy has provoked fiery criticism from Trump, who has demanded lower rates. For their part, Fed officials, including Fed Chair Jerome Powell, have insisted they make policy decisions based on economic and not political considerations. They have kept interest rates the same throughout Trump's presidency so far. Financial markets have translated the Fed's noncommittal message into an expectation that the central bank will hold off on rate cuts during the summer. On Tuesday, investors were pricing in a nearly 70% chance that the central bank would at least make one rate cut by September, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Business
- Yahoo
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.
Wall Street Journal
a day ago
- Business
- Wall Street Journal
Bostic: Why the Fed Can't Assume Tariff Inflation Will Be One-Off
Atlanta Federal Reserve President Raphael Bostic says the choppy rollout of tariffs is making it harder to judge the inflationary impact. (Esa Alexander/Reuters)
Zawya
a day ago
- Business
- Zawya
Fed's Bostic says current uncertainty calls for patience on rate policy
Atlanta Federal Reserve President Raphael Bostic said on Tuesday a strong economy gives the U.S. central bank time to weigh how tariffs will impact inflation and growth, while remaining open to the possibility of a single interest rate cut at some point later this year. "I continue to believe the best approach for monetary policy is patience," Bostic said in an essay released by his regional Fed bank. In a "broadly healthy" economy, "we have space to wait and see how the heightened uncertainty affects employment and prices. So, I am in no hurry to adjust our policy stance." Speaking with reporters in a conference call, Bostic noted that in central bank forecasts released by the Fed in March he had penciled in a single rate cut for this year. "I still think there's space for that, and a lot of it will depend on how the uncertainty resolves itself," he said. But Bostic also noted in the call that inflation is still above the Fed's 2% target and underlying prices are still higher than he'd like. He said it's "a tough call" whether the Fed would be cutting rates right now if all the trade uncertainty was out of the picture, noting he's "very cautious about jumping to cuts at this point." Bostic, who does not hold a vote on the central bank's rate-setting Federal Open Market Committee this year, said in the essay the challenges of predicting what's next for interest rate policy are tied to the huge shifts in trade policy. "There is a great deal of uncertainty out there, making it quite difficult to forecast the economy with confidence." The Fed is expected to hold its benchmark interest rate steady in the 4.25%-4.50% range at its next policy meeting on June 17-18, as officials watch the economy to see how it responds to the Trump administration's erratic implementation of a huge range of import tax increases. The tariffs are broadly expected to drive up inflation and push employment down, but how much that happens is unclear. The outlook is further occluded by the President Donald Trump's rapid shifts and pauses, although his retreat from some of the most draconian tariff increases has lowered what had been mounting prospects the U.S. economy would fall into a downturn. Bostic said in his essay that there are many ways the tariffs could play out, and it's possible they might simply drive one-time price increases that the central bank can look through. He said that so far, there's little evidence tariffs have pushed inflation up and that the data seen on the economy has been pretty good despite gloomy sentiment measures. Bostic wrote "the labor market still appears broadly healthy," while adding there are some signs of weakness emerging, such as workers finding it is taking longer to get a new position. He added, "so far, these signs have had limited influence on aggregate labor market outcomes." (Reporting by Michael S. Derby; Editing by Paul Simao)
Reuters
a day ago
- Business
- Reuters
Fed's Bostic says current uncertainty calls for patience on rate policy
NEW YORK, June 3 (Reuters) - Atlanta Federal Reserve President Raphael Bostic said on Tuesday a strong economy gives the U.S. central bank time to weigh how tariffs will impact inflation and growth, while remaining open to the possibility of a single interest rate cut at some point later this year. "I continue to believe the best approach for monetary policy is patience," Bostic said in an essay released by his regional Fed bank. In a "broadly healthy" economy, "we have space to wait and see how the heightened uncertainty affects employment and prices. So, I am in no hurry to adjust our policy stance." Speaking with reporters in a conference call, Bostic noted that in central bank forecasts released by the Fed in March he had penciled in a single rate cut for this year. "I still think there's space for that, and a lot of it will depend on how the uncertainty resolves itself," he said. But Bostic also noted in the call that inflation is still above the Fed's 2% target and underlying prices are still higher than he'd like. He said it's "a tough call" whether the Fed would be cutting rates right now if all the trade uncertainty was out of the picture, noting he's "very cautious about jumping to cuts at this point." Bostic, who does not hold a vote on the central bank's rate-setting Federal Open Market Committee this year, said in the essay the challenges of predicting what's next for interest rate policy are tied to the huge shifts in trade policy. "There is a great deal of uncertainty out there, making it quite difficult to forecast the economy with confidence." The Fed is expected to hold its benchmark interest rate steady in the 4.25%-4.50% range at its next policy meeting on June 17-18, as officials watch the economy to see how it responds to the Trump administration's erratic implementation of a huge range of import tax increases. The tariffs are broadly expected to drive up inflation and push employment down, but how much that happens is unclear. The outlook is further occluded by the President Donald Trump's rapid shifts and pauses, although his retreat from some of the most draconian tariff increases has lowered what had been mounting prospects the U.S. economy would fall into a downturn. Bostic said in his essay that there are many ways the tariffs could play out, and it's possible they might simply drive one-time price increases that the central bank can look through. He said that so far, there's little evidence tariffs have pushed inflation up and that the data seen on the economy has been pretty good despite gloomy sentiment measures. Bostic wrote "the labor market still appears broadly healthy," while adding there are some signs of weakness emerging, such as workers finding it is taking longer to get a new position. He added, "so far, these signs have had limited influence on aggregate labor market outcomes."
