Atlanta Federal Reserve President Raphael Bostic indicated his openness to an interest rate cut as early as September, citing cooling inflation and a softening labor market. In an interview with the Financial Times, Bostic stressed the need to act promptly, emphasizing the risks of waiting too long to adjust monetary policy.
While acknowledging the labor market’s “weakening but not weak” state, Bostic highlighted the rising unemployment rate and the need to balance the Fed’s dual mandate of price stability and maximum employment. He noted that businesses in the southern US are increasingly pausing hiring, adding to the uncertainty surrounding the labor market’s trajectory.
Bostic’s comments reinforce market expectations for a rate cut in September, marking a potential shift in the Fed’s monetary policy stance after a series of aggressive hikes aimed at curbing inflation. While open to larger rate cuts if the labor market deteriorates rapidly, Bostic stated this is not his current outlook.
