Federal Reserve Bank of Atlanta President’s Remarks on Rate Cuts

(Reuters) – Federal Reserve Bank of Atlanta President Raphael Bostic on Wednesday indicated that with inflation decreasing and unemployment rates rising more than expected, it might be “time to move” on rate cuts. However, he emphasized the importance of certainty before making such a decision.

Bostic stated that he wants to see confirmation from the upcoming monthly jobs report and two inflation reports before the Fed’s September 17-18 meeting to ensure that economic trends are stable.

He cautioned against cutting rates only to have to raise them again later, as this would undermine public confidence in the Fed. Bostic expressed a preference for waiting longer to avoid the volatility of rate adjustments.

The Federal Reserve has maintained its policy rate in the 5.25%-5.50% range for over a year to combat high inflation. Last week, Fed Chair Powell mentioned, “the time has come” to reduce borrowing costs as price pressures have eased and the labor market has cooled.

Earlier in the year, Bostic had anticipated a single rate cut likely in the fourth quarter but recently indicated a willingness to consider earlier action.