Financial Associated Press, December 3 (Editor Zhao Hao) – Federal Reserve 'hawkish' official Raphael Bostic stated that although he believes the Fed should continue to lower borrowing rates, he has not yet made up his mind to support the bank's rate cut action this month.
On local time Monday (December 2), Bostic published an article on the Atlanta Federal Reserve's official website stating that the risk of achieving the dual mandate of maximum employment and price stability by the Federal Open Market Committee (FOMC) has changed, and they are roughly in a balanced state, thus “we should also begin to shift monetary policy to a stance that neither stimulates nor suppresses economic activity.”
Bostic believes that although the data is fluctuating, US inflation is indeed steadily moving toward the Fed's 2% target. He also stated that the labor market does not show signs of rapid deterioration, but policymakers need to remain vigilant about the risks facing inflation and employment.
Source: Atlanta Federal Reserve official website
In a phone conversation with the media, Bostic stated, “I will continue to keep my options open,” regarding whether to support a rate cut when central bank officials gather in Washington from December 17 to 18.
Since September, the Fed has cut interest rates by 50 basis points and 25 basis points, lowering the target range for the federal funds rate to between 4.5% and 4.75%. Several officials have stated that they support a more gradual pace of rate cuts in the coming months.
Bostic stated that he also supports this rate cut, as inflation is expected to reach the Fed's 2% target. He also mentioned that the reduction in job vacancies proves that restrictive monetary policy is helping to cool the labor market, but overall, the labor market remains stable.
“These trends do not send strong signals indicating that the labor market is rapidly deteriorating, nor do they indicate extreme tension. On the contrary, they suggest that faced with higher interest rates, the labor market is cooling in an orderly manner, and we have heard this perspective from business contacts.”
Bostic listed several reasons why he believes inflation will continue to decline, mentioning that weak rents should eventually push down housing inflation – a key issue in the overall price pressures over the past year. However, he also stated, “There are certainly upward risks to prices.”
When asked whether the potential tariffs from President Trump would affect his economic outlook, Bostic stated that he would ask his staff to wait until fiscal policy becomes clearer before making a decision.
“In the past six or seven years, what we have seen is that many proposals have been put forward, but there have been significant changes during the deliberation process.”
（Financial Associated Press Zhao Hao）
