FOMC voter and President of Atlanta Federal Reserve, Bostic, stated that action must be taken as soon as possible considering the continuing cooling of the labor market and the lagging of central bank policy. It is worth noting that just the day before this statement, Bostic reaffirmed his position of rate cuts at the end of the year.
Overnight CPI data shows that inflation has slowed down as expected, prompting the dovish turn of the Federal Reserve's voting members this year.
Raphael Bostic, the FOMC voting member and president of the Atlanta Fed, told the media that given signs of cooling in the labor market, the Fed cannot take the risk of relaxing policy too late and holds an "open attitude" toward rate cuts in September.
Bostic believes that the Federal Reserve has made progress in fighting inflation and needs to consider employment issues next:
"Now that inflation is entering the target range, we must look at the other side of the task—the unemployment rate has risen significantly from its low point."
"This does make me rethink what the appropriate timing is, so we have an open attitude towards taking action before the fourth quarter."
In Bostic's view, the Federal Reserve faces significant risks when weighing when and how to cut interest rates:
"Waiting does bring risks, which is why we must be extra vigilant about this, because our policy has lagged in both directions and we must take action as soon as possible."
It is worth noting that just the day before this statement, Bostic reiterated his stance on rate cuts at the end of the year, saying that more data was needed before beginning cuts to avoid a sharp turn in subsequent rate policies due to early cuts.
Editor/ping