(Bloomberg) -- Federal Reserve Bank of Atlanta President Raphael Bostic repeated that he sees the central bank delivering one interest-rate cut this year amid tariff-induced uncertainty.
But, he added, a faster-than-expected resolution to some of the Trump administration’s ongoing trade negotiations could mean the Fed can act earlier.
“If it takes negotiations a long time to settle things out — we have another 90 days on China, for example — that starts to push much further into the summer, in which case we won’t actually know what the true effects are going to be for several months after that,” Bostic said Monday in an interview with Bloomberg Television on the sidelines of his bank’s 2025 Financial Markets Conference in Fernandina Beach, Florida.
But there’s also the possibility that trade discussions are resolved more quickly and tariff rates come in lower than forecast, he said.
“In that case we may be able to pull forward some of our actions, because there may not be as much that we need to do in terms of managing the price level,” he said.
Bostic said the Fed can’t act in the current environment in which consumers and businesses have halted big spending decisions as they wait to see how tariff negotiations play out.
Most Fed officials have said interest rates are well positioned for the central bank to wait and see how the economy reacts to new levies. Bostic called the current policy setting “mildly restrictive,” meaning it’s weighing a bit on economic activity. Fed officials have kept rates on hold this year after cutting them by a full percentage point in the last three months of 2024 as they try to further cool inflation.