- Bostic Is open to another 50 basis point cut of labor market shows continued weakness.
- Baseline cases for an orderly easing with inflation and expected to continue slowing and job market to hold up.
- He does not want to get overconfident on inflation given core personal consumption expenditures price index remains at 2.7%.
- He will be watching incoming jobs stated closely if employment growth slows much below 100 K jobs it would warrant closer questioning of what is happening.
- Business contacts continue to say they do not expect layoffs.
- Recent PCE data shows disinflation still on track.
- Baseline outlook involves gradual Fed easing over 15 months, targeting a policy rate of 3.00%-3.25% by the end of 2025.
- He currently supports one additional 0.25% rate cut this year, pending upcoming inflation and labor market data.
The end of 2025 rate of 3% – 3.2% versus the end of 2025 Fed projection of 3.4% . However, the 25 basis point additional rate cut this year is well below what the market is expecting and even the 50 basis point expected by the Fed's dot plot.
