Bostic: US Federal Reserve's December decision still under consideration
December 2, 2024
Atlanta Federal Reserve President Raphael Bostic said that future monetary policy decisions are still under consideration, stressing that no decision has been made in advance regarding the outcomes of the December meeting. He stressed that upcoming economic data will be the decisive factor in determining the most appropriate path for monetary measures, especially as questions remain about the speed and amount of interest rate cuts required to keep inflation within target levels while avoiding causing undue harm to the labor market.
The official noted that the balance between inflation and employment has become clearer, supporting a move toward a neutral monetary policy that seeks to maintain price stability without adversely affecting the labor market. However, he stressed that monetary policy will remain cautious, as mistakes – if they occur – will be made in the direction of excessive tightening rather than excessive expansion of policies.
Regarding future interest rate cuts, Bostic explained that the pace or time frame for those cuts in 2025 has not yet been determined, indicating that monetary policy will adapt according to changing economic conditions, including the effects of tariffs and new policies of the US administration.
He added that companies are not currently feeling significant pressure on hiring, but he pointed out that there are no expectations of significant weakness in the labor market in the coming period, which enhances confidence in the stability of the US economy.
The Fed member also spoke about the performance of the economy, noting that it remains stable and close to achieving price stability, with a labor market nearing maximum employment. Despite fluctuations in the path of inflation, he indicated that progress towards achieving the 2% inflation target remains on track.
He concluded his remarks by stressing that the US Federal Reserve will not rush to make decisions to cut interest rates, while being careful to avoid expecting a cut at every meeting. He explained that the flexibility of monetary policy will remain a key element in confronting economic changes, ensuring price stability and sustainable economic growth at the same time. Read also:
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