In Final Comments Before Quiet Period, Federal Reserve Speakers Contemplate Increased Inflation
Federal Reserve officials offered divergent views on the potential trajectory of monetary policy amidst concerns over rising inflation. Minneapolis Federal Reserve Bank President Neel Kashkari suggested that rate cuts might be deferred until 2025, while Atlanta Federal Reserve Bank President Raphael Bostic prioritized the possibility of interest rate hikes to curb inflation surpassing 2%.
Inflation, which surged in 2024 after a rapid decline the previous year, prompted Fed officials to contemplate their response should progress on inflation falter. Kashkari refrained from confirming his earlier forecast of two rate cuts for 2024, indicating a need to reassess incoming data before the upcoming meeting.
Bostic maintained his projection of a single interest rate cut for the year but acknowledged the potential for rate hikes if inflation persists above the target. Chicago Federal Reserve Bank President Austan Goolsbee declined to speculate on conditions prompting rate hikes but echoed the priority of reining in inflation to meet the 2% target.
These statements are expected to be the last significant remarks before Fed officials enter a “blackout period” ahead of their next meeting, during which they are prohibited from discussing monetary policy matters. The upcoming release of key economic indicators, including first-quarter Gross Domestic Product and the Personal Consumption Expenditures inflation index, may provide further insights into the Fed’s stance.
Following the blackout period, Federal Reserve officials will be able to comment on their decision on May 3, after their meeting on April 30.
