Fed Officials: No Rush to Cut Rates in Uncertain Climate

Federal Reserve officials Susan Collins and Raphael Bostic have signaled a cautious approach to further interest rate cuts, emphasizing the need to evaluate economic impacts of both recent monetary policy changes and new White House initiatives.

Following three rate cuts totaling 100 basis points since September, the officials want to observe the effects before making additional adjustments.

The Fed must also consider Trump’s new tariffs, which Collins notes could cause short-term inflation across both final goods and intermediate production materials.

While both officials expect rates to eventually decrease from the current 4.25-4.5% range, with Bostic suggesting a target of 3.0-3.5%, the timing remains uncertain.

Some economists now project the Fed may hold rates steady throughout the year. Bostic maintains optimism about continued labor market strength and inflation’s trajectory toward the Fed’s 2% target, but emphasizes the need for patience given the evolving economic landscape.