Atlanta Fed President Raphael Bostic said in a Bloomberg interview that he’s now projecting just one cut by year-end, down from his earlier expectation of two.
Bostic explained the shift was due to his view that inflation will be “very bumpy and not move dramatically and in a clear way to the 2% target”. With inflation unlikely to return to target until 2027, he believes the path to neutral must also be delayed.
Bostic also expressed concern about the inflationary impact of rising tariffs. While such measures are often assumed to cause a one-off increase in prices, Bostic suggested the current environment could be different.
In his view, businesses and consumers may have grown more tolerant of elevated inflation following the pandemic, making price hikes more likely to stick. He noted that many business leaders now feel confident about “a complete pass-through” of higher costs on to customers without fear of losing market share.
