On October 19th, Financial Sector News (Editor: Niu Zhanlin) reported that on Friday Eastern Time, Atlanta Fed President Bostic said the Federal Reserve should patiently and gradually lower its policy interest rates, so that it can bring the inflation rate down to the target level of 2%, and also maintain the US economy from falling into a recession.

At an American business and economic education forum held in Mississippi, Bostic pointed out: "I am not eager to adjust interest rates to a neutral level, we must restore the inflation rate to the target level of 2%; I don't want the progress in combating inflation to stall because we haven't implemented restrictive measures for long enough, so I will maintain patience."

The neutral interest rate refers to a level of interest rates that neither stimulates nor suppresses economic growth. Bostic believes that the neutral policy interest rate should be in the range of 3% to 3.5%.

In addition, Bostic pointed out that he expects the Federal Reserve to further reduce the benchmark interest rate. "If the economy continues to develop along the current trend, if inflation continues to decline, the labor market remains strong, we continue to see positive production, then we will be able to continue on the path back to the neutral interest rate."

Bostic expects that by the end of 2025, the inflation rate in the United States may decrease to the target of 2% set by the Federal Reserve, by that time interest rates should also be able to adjust to the neutral level.

While the financial markets currently expect the Federal Reserve to cut interest rates twice before the end of this year, each time by 25 basis points, and further cuts next year, so that by September 2025, the federal funds rate may fall to the range of 3.25%-3.5%.

Last month, the Federal Reserve cut interest rates by a larger-than-expected 50 basis points to prevent the labor market from cooling too quickly. However, since then, the data on the US employment market has been much stronger than expected, with an acceleration in monthly job growth, and the unemployment rate has also dropped to 4.1%.

Bostic stated on Tuesday that he expects the Federal Reserve to cut interest rates by another 25 basis points this September based on the dot plot submitted in September this year.

"I have never included an economic recession in my own expectations. I have always believed that the US economy has enough momentum to absorb the restrictive Fed policies and drive inflation back to the target level of 2%."

In addition to Bostic, Daly, the President of the San Francisco Federal Reserve, also maintains an open attitude towards not cutting interest rates in one of the remaining two Fed policy meetings this year. Daly stated in a speech at New York University this week that if the US economy continues to maintain recent trends, 'one to two rate cuts are reasonable'.

Daly also emphasized that the central bank's 50 basis point rate cut last month does not indicate the magnitude or speed of future rate cuts. Despite two economic reports released in the past month being better than expected, she expressed uncertainty about the resurgence of the inflation rate.