Atlanta Fed Pres. Bostic speaking
- Inflation on track to fully return to 2% inflation but too early to claim victory
- Expect two quarter-point cuts this year
- Need to see more progress and gain confidence on disinflation before reducing rates.
- Strength in the economy and job market means the Fed has luxury of proceeding without urgency.
- Businesses are not distressed
- Businesses are ready to invest and hire when the time is right
- Pent up exuberance in the economy is an upside risk to inflation
- Inflation is still widespread
- It’s clear in places like housing and real estate that monetary policy is having an impact
- 3rd-quarter cut likely followed by a pause
- There is no urgency to cut rates given the economy strength
- Return to price stability is not assured
Comments are tilting more to the hawkish side. He talks about two cuts. He talks about inflation being still widespread. He talks about pent up exuberance in the economy is an upside risk to inflation.
The Fed cut probabilities show a 69% chance of a cut in June, and an 88% chance of a cut in July. September is all but a guarantee of a cut by then.
Fed rate cut probabilities
For the full speech, click here.
The S&P index is nailed near unchanged at 5136.49. The NASDAQ index is down 26.01 points or -0.16% at 16248.93.
The 2-year yield 4.608% +7.3 basis points and the 10-year yield 4.223%, +3.9 basis points.