Fed's Raphael Bostic forecasts one rate cut and no recession in US in 2025

Atlanta Fed President Raphael Bostic announced his expectations for a slowdown in the US economy this year, but not a recession. He also anticipates just one interest rate cut in 2025.

Bostic predicts economic growth in the range of 0.5–1% this year as market uncertainty and concerns about economic prospects weigh on consumers. Unpredictable trade policies have made businesses very cautious in their decision-making.

Bostic anticipates only one rate cut this year considering that the current uncertainty is unlikely to resolve itself and the outcome of the US-China talks is still unclear.

Last week, Bostic suggested it would not be prudent to adjust monetary policy when the next steps are uncertain. Fed Chairman Jerome Powell has made clear the US regulator has no intention of aggressively reducing borrowing costs.

Fed officials kept interest rates unchanged at their last meeting. They stressed that there are increased risks of rising unemployment and prices. The officials also shared Bostic's view on tariffs putting upward pressure on inflation.