Atlanta Fed president on inflation, slashing interest rates: ‘It’s not done ‘til it’s done’

ATLANTA - The president of the Federal Reserve Bank of Atlanta told FOX 5 that he has reason to feel cautiously optimistic about the local economy heading into 2024.

"I think that the economy is still going to grow, not as fast as last year," Atlanta Fed president Raphael Bostic told FOX 5’s Rob DiRienzo in a one-on-one interview.

The Fed’s goal has been to get inflation to two percent, but the latest numbers show that still may be a way off.

Bostic is eyeing a reduction in interest rates around June.

"I do think that by the second half of the year, there will be a time where it will be appropriate to cut interest rates," he said. "I’ll be watching."

Some analysts have predicted that could come as soon as March, but now it’s looking less likely.

After our interview, on Thursday a report released by the Bureau of Labor Statistics showed consumer prices rising 3.4 percent in December.

But jobs last month still surpassed some economists’ expectations.

Bostic said the biggest challenges for Atlanta’s economy include a worker shortage, and a key part of that is a lack of affordable housing access for those workers.

Bostic says all things considered, this is still a post-pandemic economy and a full rebound from the fallout will take some time.

"It’ll be slower than I think what some people have projected, but we’re in a good place right now," he said. "I’m hopeful that as we move forward the strength that we’ve seen in the Atlanta region and in the southeast will allow our growth to continue as the economy normalizes from the pandemic."

Higher interest rates are the Fed’s way of fighting inflation.

Some economists worry that if the Fed brings down those rates too quickly – inflation will shoot back up.

"It’s not done till it’s done," he said. "We are not. We are not at 2% yet, inflation is still in the 3% range, which means we still have work to do."