Bostic Sees Fed at Neutral in Maybe One or Two Rate Cuts

Summary

Atlanta Fed President Raphael Bostic outlined his policy outlook in conversation with former Atlanta Fed President Dennis Lockhart. Bostic said he had no rate cuts projected for 2026, sees the economy with strong momentum, and believes policy is only mildly restrictive. He said one or two cuts would bring policy to neutral but risk keeping inflation above target, so he supports patience. He also noted labor market stabilization and volatile data from the government shutdown.

• Bostic did not project any rate cuts for 2026.
• He sees the economy as having strong momentum.
• He views the current policy stance as mildly restrictive, not strongly restrictive.
• He said one or two cuts would bring policy to neutral but risk inflation failing to reach 2%.
• He favors patience and waiting for clearer data.
• The labor market appears to have stabilized, giving the Fed space to wait.
• Government shutdown may cause more volatile statistics through April.