(Bloomberg) -- Federal Reserve Bank of Atlanta President Raphael Bostic said he expects the US economy to slow this year but to remain robust, adding that the downward path for inflation could see some bumps.
Bostic said he projects GDP growth to be about 2% in 2025 as households spend down their savings. Growth is on track for about 2.6% this year.
The Atlanta Fed chief added that he expects the Fed’s benchmark rate to drop to about 3% to 3.5% in the long run, but the timing for reaching that level is uncertain. It’s currently in a range of 4.75% to 5%.
“The question everybody asks us is ‘how fast?’ I think it depends on what happens in the labor market and what happens with inflation,” Bostic said Tuesday during a moderated conversation in Atlanta. “I actually think we’re going to see inflation be choppy, and I expect that we’ll see employment stay robust.”
Fed officials lowered borrowing costs by a half percentage point last month, a larger-than-typical move meant to protect the strength of the economy.
A robust jobs report and a stronger-than-expected inflation reading for September have prompted several policymakers to say the US central bank should move at a more incremental pace with future rate cuts.
Bostic said last week he was open to leaving rates steady at one of the Fed’s two remaining meetings this year if data support that approach. He repeated Tuesday that he had penciled in one more quarter-point rate cut for this year at last month’s meeting, but that the final path for rates would depend on the economy.
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