Atlanta Fed President reiterates cautious stance, still expects only one rate cut in 2025.

Atlanta Fed President Bostic said Monday that he still expects only one rate cut in 2025 and three more in 2026, reiterating his cautious stance on the current monetary policy path. Speaking at an event hosted by Market News International, Bostic said, "I still stick by the original view," referring to his stance that he expects only one rate cut this year. He added that he has "penciled in" three rate cuts for next year. Bostic emphasized that in the current economic environment, the Fed has "plenty of patience" to observe the situation before taking action. "The labor market remains very strong, and we can certainly afford to take a little bit of time," he said. "We have time to see how the economy evolves before we act." When asked about the impact of tariffs on the economy, Bostic noted that while early policy signals have helped businesses adapt to the process of tariff increases to some extent, there is still a high degree of uncertainty in trade policy direction. He warned that the inflation risks caused by tariffs remain a "pending issue," as "many price effects related to tariffs have not yet fully transmitted to the real economy." Bostic also stated that policy uncertainty is not limited to the trade area. He pointed out that the public generally wants monetary policy to remain stable, and that frequent policy shifts can weaken market confidence. Meanwhile, economic data from the U.S. regions shows that manufacturing activity in Texas remains weak. According to data released by the Dallas Fed on Monday, the Texas manufacturing business activity index recorded -12.7 in June, still in contraction territory but an improvement from -15.3 in May, indicating a slight narrowing of the contraction. Despite overall weak economic conditions, business expectations for the next six months have improved. The future output index decreased from 31.6 to 22.6 in June, but the overall future business activity index increased from 1.4 to 14.4, slightly above historical average levels. Specifically, the production index rose slightly to +1.3 (previously +0.9); capacity utilization index was -1.0 (previously -1.5); new orders index was -7.3 (previously -8.7); and the business outlook index was -8.9 (previously -11.3).