sees 50 basis points in rate cuts in 2024

Atlanta Federal Reserve (Fed) President Raphael Bostic gave some talking points about the 2024 economic outlook while attending the Atlanta Rotary Club on Monday.

Atlanta Fed President Bostic will be taking a regular seat as a voting member on the Federal Open Market Committee (FOMC) in 2024 when seats change hands at the Fed’s first meeting of 2024 on January 30-31.

An alternate voting member during the 2023 Fed year, Bostic will maintain a voting presence on the FOMC through 2024, and his perspective on market conditions will carry extra weight as a key policymaker as the Fed heads into the next rate cut cycle.

Highlights: 

• Inflation has declined more than initially expected, sees two quarter-point cuts by year-end 2024.
• Short-term inflation measures, specifically three-month to six-month horizons, will matter significantly more in 2024.
• Goods inflation has returned to pre-pandemic levels, but services inflation remains stickier, falling more slowly.
• Is comfortable with the current rate level.
• The immediate goal now is to avoid a meaningful rebound in inflation, Fed will need to pay close attention.
• Fed still needs to give tight policy time to work on cooling off inflation.
• Bostic says the US is on the path to 2% inflation, goal is to remain on that path.
• Headline job number growth has been strong, but caution is needed as recent strength focuses on a relatively small section of the overall economy.

Market reaction

Fed President Bostic’s remarks saw a minor uptick in the US Dollar Index (DXY), rising to 102.30 to pare back Monday’s early losses, while the S&P 500 equity index is holding onto near-term gains near $4,730 to kick off the new trading week.