Due to uncertainties in policies such as tariffs, Federal Reserve officials have changed their expectations for interest rate cuts from 2 times to 1 time

Uncertainty in tariff policy has led to a more cautious stance from the Federal Reserve, with the President of the Atlanta Federal Reserve lowering his expectations for interest rate cuts this year.On March 25, according to Bloomberg, Atlanta Federal Reserve President Raphael Bostic now expects only one rate cut this year, down from the previous expectation of two, primarily because the increase in tariffs has hindered the process of inflation decline.Bostic explained, "I have adjusted my expectations to one cut mainly because I believe inflation will be very volatile and will not move clearly and significantly toward the 2% target. With the delay in inflation decline, I believe the corresponding policy path also needs to be delayed."Bostic stated that he would prefer to keep interest rates unchanged, even if it means the Federal Reserve may have to take more forceful action at some point. In the current uncertain environment, this is better than risking moving in the wrong direction and then having to change course later.Bostic currently expects the inflation rate to return to the Federal Reserve's 2% target at some point in early 2027. This expectation is consistent with the forecasts released at last week's Federal Reserve policy meeting. In September of last year, officials estimated that the target would be reached in 2026.Bostic emphasized that the uncertainty brought about by frequent policy changes during the Trump administration has made economic forecasting more difficult.Bostic now expects U.S. GDP to grow by 1.8% this year, down from the December forecast of 2.1%. He anticipates that the unemployment rate will be around 4.2% or 4.3% by the end of this year, which he said is "still quite strong by historical standards."Bostic noted that the introduction of more tariffs increases the upside risk to inflation, while declining confidence or increased layoffs pose downside risks to employment. However, he also emphasized that he would not further adjust his forecasts until policy changes are implemented:Given the rapid changes in policy from week to week and month to month, it is difficult for me to confidently consider these factors until we actually see them implemented and stabilized.Regarding Powell's statement that the impact of tariffs on inflation is expected to be "temporary," Bostic expressed caution about the term temporary, saying, "I wouldn't use that word."While tariffs have historically had a one-time impact on prices, Bostic indicated that the recent round of high price increases may suggest that this impact is more lasting.