In a CNBC interview today, Atlanta Fed President suggested that rate cuts could be on the horizon by the end of 2024, contingent on the economy’s performance. Bostic outlined a scenario where “continued robustness in GDP, unemployment, and a slow decline of inflation through the course of the year” could warrant a policy adjustment in the fourth quarter.
He also acknowledged the persistence of inflationary pressure into the current year, “hasn’t moved very much relative to” levels observed at the end of 2023. “There are some secondary measures in the inflation numbers that have gotten me a bit concerned that things may move even slower,” he warned.
“Those are much higher now than they were before and they’re starting to trend back to what we saw in the high inflation period,” Bostic added. “They’re moving away from what we’d like to see. So I’ve got to make sure that those aren’t hiding some extra upward pressure and pricing pressure before I’m going to want to move our policy rate.”
US ISM services falls to 51.4, prices down sharply to 53.4
US ISM Services PMI fell from 52.6 to 51.4 in March, below expectation of 52.8. Business activity/production ticked up from 57.2 to 57.4. New orders fell from 56.1 to 54.4. Employment rose slightly from 48.0 to 48.5. Prices fell sharply from 58.6 to 53.4.
ISM said: “The past relationship between the Services PMI and the overall economy indicates that the Services PMI for March (51.4 percent) corresponds to a 0.8-percent increase in real gross domestic product (GDP) on an annualized basis.”
Full US ISM services release here.