Two FED Members Talked About Inflation and Interest Rate Cuts: While One Gave a Message of Disappointment, the Other Gave a Date for the...

While Bitcoin rose after the US data announced last week, the latest inflation data balanced the worsening situation.

Following these economic data, two FED members spoke on the first day of the week.

Making statements about the course of inflation and the FED's monetary policy, Atlanta Fed President Raphael Bostic and Fed Vice President for Supervision Michael Barr evaluated the data.

FED member Bostic spoke first and stated that inflation would eventually reach the 2% target and that it would take some time.

Stating that the FED is not yet in a position to signal a return on interest rates, that is, to reduce them, Bostic stated that when the time comes, they will reduce interest rates, as other major central banks are currently doing.

Highlights from Bostic's statement are as follows:

“Inflation data is very up and down.

My prediction is that inflation will continue to fall this year and next year. But we still have a long way to go when it comes to inflation.

FED is open to all possibilities on the economic path. Our policy stance is restrictive.

The risks are really balanced right now.

As data continues to be volatile, prices will fall at a slower pace than many expect. “It will take a little longer than expected for this downward momentum to be reflected in the economy.”

Finally, Bostic stated that there was no change in the FED's forecast regarding interest policy and said that he expected an interest rate cut in the October-December quarter this year.

Data Disappointing!

After FED member Bostic, Michael Barr also evaluated the inflation data and said that the US inflation data for the first quarter of 2024 was “disappointing”.

Considering these data, Barr stated that the FED still cannot find the evidence it needs to loosen monetary policy, and stated that the FED will continue to wait to reduce interest rates.

“The FED will wait a little longer for the interest rate cuts that the markets are eagerly awaiting. The FED will remain on hold until it becomes clear that inflation will return to 2 percent, which is our final target.

“The Fed's policy is restrictive enough for now, and we'll need to give it some more time for our restrictive policy to continue working.”

*This is not investment advice.