Fed's Bostic casts doubt on rate cuts this year even if there's a recession

Atlanta Federal Reserve President Raphael Bostic said Monday that helium doesn't foresee complaint cuts astatine slightest done 2023, adjacent if there's a recession.

"For me, ostentation is occupation No. 1. We've got to get backmost to our target," helium told CNBC's Steve Liesman during a "Squawk Box" interview. "If there's going to beryllium immoderate outgo to that, we've got to beryllium consenting to bash that."

His comments came arsenic the Fed has raised rates 10 times since March 2022 successful an effort to bring down ostentation that a twelvemonth agone was moving astatine its highest levels since the aboriginal 1980s.

Even though ostentation is inactive moving good up of the cardinal bank's 2% year-over-year target, marketplace pricing is indicating that the Fed is done hiking and successful information volition beryllium cutting rates aggregate times earlier the extremity of the year. That is based mostly connected expectations that the system is headed for a crisp slowdown and a apt shallow recession, which has been predicted by the Fed's ain economists.

But Bostic said helium doesn't spot cuts coming anytime soon and successful information expects an summation would beryllium much apt astatine this point.

The consumer terms index, released past week, showed header ostentation moving astatine a 4.9% yearly complaint portion halfway — which excludes nutrient and vigor and usually receives greater accent from Fed officials — was astatine 5.5%.

"What we've seen is that ostentation has been persistently high, consumers person been truly resilient successful presumption of their spending, and labour markets stay highly tight. All of those suggests that there's inactive going to beryllium upward unit connected prices," helium said. "If there's going to beryllium a bias to action, for maine would beryllium a bias to summation a small further arsenic opposed to cut."

Nevertheless, Bostic said helium remains optimistic connected inflation. He noted that successful the CPI report, which covers the prices consumers wage for a voluminous substance of goods and services, less than fractional the items were supra 5% connected an yearly basis.

That astatine slightest provides immoderate denotation that things are moving successful the close direction.

"There's inactive a batch of assurance that our policies are going to beryllium capable to get ostentation backmost down to our 2% target," Bostic said. "And to beryllium afloat clear, we're going to bash each that we request to marque definite that that happens."