Fed Bostic Appears to Share New Indications About Interest Rates to the Market!

<p>&nbsp;Atlanta Federal Reserve President Raphael Bostic said on Friday that he does not foresee an interest rate cut until the end of 2024.</p><p><br /></p><p>Despite progress on the issue of inflation and the economic slowdown, the central bank official said there is still a lot of work to be done before the Fed reaches its inflation goal of 2% annually.</p><p><br /></p><p>The Fed has raised the prime lending rate 11 times since March 2022 with a total increase of 5.25 percentage points. Although Bostic said that he does not see policymakers easing interest rates anytime soon, he clearly asserted that interest rates have reached a level "sufficiently restrictive" where they do not need to be raised any further.</p><p><br /></p><p>Bostic is not a voting member this year on the interest rate-setting Federal Open Market Committee (FOMC), but he is set to have voting rights in 2024.</p><p><br /></p><p><br /></p><p>He said that he does not expect "we will cut rates before the middle of next year, at the earliest."</p><p><br /></p><p>The probability of a December hike is just 25%, based on the CME Group's FedWatch Tool. The market expects two or three cuts of a quarter point by the end of 2024.</p><p><br /></p><p>One of the reasons that will cause the Fed to consider lowering rates is a slowdown in economic growth. Although Bostic said that he did not expect a recession to happen, he sees the current situation as changing.</p><p><br /></p><p>Bostic was speaking after some significant movements in financial markets, notably in bond yields that crossed the psychologically important 5% level earlier in the session, the benchmark 10-year US bond yield was relatively loose, and recently hovered around 4.97%.</p>