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Atlanta Federal Reserve President Raphael Bostic expressed openness to the possibility of another half-percentage-point interest rate cut at the November meeting of the U.S. Central bank, should upcoming data reveal a more rapid slowdown in job growth than expected. In an interview with Reuters, Bostic noted that if the labor market weakens unexpectedly, he would be inclined to support a significant rate cut.

Bostic’s current forecast entails a gradual easing of Fed policy over the next 15 months, aiming for the Central bank‘s policy rate to settle in the 3.00%-3.25% range by the end of 2025. He emphasized the importance of monitoring Inflation trends and upcoming job reports, particularly the U.S. employment report for September, to guide future rate decisions. Data indicating a continued decline in Inflation risks could warrant a patient approach, whereas a substantial weakening of the labor market would prompt a more urgent response.

The Federal Reserve official highlighted the significance of sustaining job growth above a certain level to absorb new entrants to the labor market. While acknowledging a slowdown in labor market activity, Bostic pointed out that business contacts in his district have not signaled impending layoffs, indicating the resilience of the job market.

Overall, Bostic emphasized the need for a gradual transition to a neutral interest rate environment, ensuring that Inflation returns to target levels while minimizing disruption in labor markets. The evolving month-to-month data will shape the pace of future policy adjustments, aligning with the Fed’s dual mandate of stabilizing prices and promoting maximum employment.

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