Former Boston Fed President Eric Rosengren has outlined the potential for two interest rate cuts this year. He cited recent Federal Open Market Committee (FOMC) discussions and stabilizing inflation trends. “I am expecting we’ll probably get some more favorable inflation numbers over the next couple of months,” he opined.
Former Fed President Discusses Potential for 2 Interest Rate Cuts This Year
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‘I Don’t Think We’re Down to Just One Yet,’ Rosengren Said About Rate Cuts
Former President of the Federal Reserve Bank of Boston, Eric S. Rosengren, discussed the likelihood of the Federal Reserve implementing two interest rate cuts this year in an interview with CNBC on Friday.
Rosengren highlighted that at the recent Federal Open Market Committee (FOMC) meeting, eight participants indicated the possibility of two rate reductions in this year. He also commented on recent inflation trends, noting that reports in the spring suggested inflation was stabilizing, based on both the Consumer Price Index (CPI) and the Personal Consumption Expenditures (PCE). Rosengren mentioned that favorable CPI data received around the time of the FOMC meeting supports this outlook. He anticipates more positive inflation figures in the coming months, stating:
I am expecting we’ll probably get some more favorable inflation numbers over the next couple of months. If that does happen, that would set up a potential for an easing in September and possibly one in December. So I don’t think we’re down to just one yet.
The former Boston Fed president emphasized that this projection relies on continued favorable inflation data. He noted that the feasibility of two rate cuts depends on incoming data, adding that if the data does not meet expectations, achieving the two cuts might be difficult. Rosengren concluded by emphasizing the importance of monitoring inflation trends throughout the summer to determine the feasibility of the proposed rate reductions.
Recently, Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, suggested that a single rate cut is a reasonable expectation for this year. He concurred with Bank of America’s prediction that the Fed will likely reduce rates once, probably in December. “I think that’s a reasonable prediction,” Kashkari said, noting that it aligns with the Fed’s Summary of Economic Projections, which also forecasts one rate cut this year. He also emphasized that any decision would be data-dependent, highlighting the importance of gathering more information on inflation, the economy, and the labor market before making any moves.
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