Fed's Bostic Hints at 2025 Rate Cuts Amidst Trump Policy Uncertainty

The Atlanta Federal Reserve President, Raphael Bostic, has hinted at potential interest rate cuts by the central bank in 2025. In a recent statement, Bostic suggested that the Fed may lower interest rates twice this year, although he expressed uncertainty about the impact of President Donald Trump's trade and migration policies.

Bostic's comments come amidst a backdrop of a strong US economy and solid monetary policy, as highlighted in an essay he wrote. While acknowledging the country's economic strength, Bostic emphasized the uncertainty surrounding the new Trump administration's policies and their potential impact on the labor market and inflation.

Following the Federal Reserve's FOMC meeting in late January 2025, Chair Jerome Powell announced that the bank would maintain the interest rate at the 4.25%-4.5% level. Powell later shared a hawkish approach to interest cuts, stating that the Fed sees no urgency in altering its policy as the economy remains strong.

Despite the recent decline in inflation, Bostic considers it the biggest risk to the Fed's dual mandate. He is increasingly focused on achieving 2% inflation without compromising labor market gains. However, the Federal Reserve's next move remains unclear, and it is uncertain how it will impact the crypto market. If the Fed maintains its hawkish stance, it could potentially trigger a bearish sentiment.