Raphael Bostic, the president of the Atlanta Federal Reserve Bank, stated on the 3rd that while the U.S. economy is performing reasonably well, more time is needed to observe the impacts of inflation and tariffs on the economy, thus maintaining a cautious stance on interest rate cuts. Bostic, although not a voting member of the FOMC this year, offers important insights into the Fed's monetary policy direction.

He reiterated in his latest economic commentary that monetary policy should remain patient until there is a clearer understanding of how the tariffs and other economic measures from the Trump administration will affect the overall economy. He noted that the impact of tariffs on prices may begin to surface in the coming weeks, and if tariffs persist, it could lead to increased price pressures, possibly resulting in more persistent inflation expectations.

According to the latest data, the year-on-year rate of the core Personal Consumption Expenditures (PCE) price index in April was 2.1%, still above the Fed's 2% target. Bostic acknowledged that while recent inflation data is encouraging, the underlying inflation pressure remains "still elevated," and it is a "difficult choice" to navigate.

Bostic indicated that he expects just one rate cut opportunity throughout the year, projecting for more clarity by 2025, but emphasized that it would depend on how economic uncertainties resolve. He also stated that the Fed is unlikely to adjust interest rate policy unless data clearly indicates a shift.