After Employment Data, Senior Fed Official Bostic Talks About Rate Cuts – What Does He Expect?

Atlanta Fed President Raphael Bostic told CNBC that July employment data suggests risks in the labor market may be increasing. However, Bostic said it’s too early to change the economic outlook despite the data.

“Today’s data and the revisions suggest the economy and labor market may be weakening more broadly than what we’re seeing in the Atlanta Fed area,” Bostic said. Still, he maintained that this week’s interest rate decision was the right one, adding, “This data wouldn’t have changed our decision.”

Downward revisions to July’s data revealed that employment growth has lost momentum. Bostic said, “The data suggests the labor market is slowing, but it remains strong in many respects.” He noted that he hasn’t received any significant signals from companies about layoffs, adding that unemployment concerns are not yet prevalent at this stage.

Bostic said, “Going into this week, I thought the inflation risk was greater than the employment risk. However, today, I see these two risks becoming more balanced.” Recalling the delicate balance between the Fed’s dual goals of employment and price stability, Bostic stated that risks on both sides must be carefully monitored.

Bostic, who also commented on trade tariffs, said that customs duties could have a longer-lasting impact on consumer psychology. “Customs duties don’t work as described in the textbooks,” he said, emphasizing the complexity of this process.

Bostic, who maintains his forecast for a 2025 interest rate cut based on current data, said, “We need to reassess our views as new data becomes available.” He also noted that there is an active debate about how restrictive the Fed’s policies currently are.

*This is not investment advice.