Head of Atlanta Fed forecasts one interest rate cut this year

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, currently projects just one interest rate reduction in 2025. Elevated import tariffs imposed by the US on key trading partners are impeding progress toward lower inflation.

The official stated that the Consumer Price Index should reach the Federal Reserve's 2% target by early 2027, consistent with his colleagues' forecasts released last week.

In a recent Bloomberg interview, Raphael Bostic pointed out that President Trump's unpredictable policy changes have made economic forecasting particularly challenging.

The Atlanta Fed president sees US economic growth slowing to 1.8% this year versus December's 2.1% estimate. He predicts unemployment will settle around 4.2% by December. In addition, tariffs could push inflation higher. However, the official cautions against forecast changes until Trump's policies take clearer shape.