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Investing.com -- Atlanta Federal Reserve President Raphael Bostic indicated on Thursday that while risks to the job market have increased, it remains premature to commit to interest rate cuts before the Fed’s September meeting as key economic data is still forthcoming.
Speaking to a Florida business group, Bostic maintained his view that a single quarter-point rate cut is likely all that will be appropriate in 2025. He emphasized that upcoming data on inflation and employment will help determine the balance of risks between the two factors.
"The employment number did say that the risk on the employment side is much higher than it had been...I will definitely be looking carefully," Bostic said.
The Federal Reserve is scheduled to meet on September 16-17 and is widely expected to reduce its benchmark policy rate by 0.25 percentage points. The current rate has remained steady in the 4.25% to 4.50% range for the past five meetings.
July’s employment report showed slowing job growth and a rising unemployment rate. The Bureau of Labor Statistics also significantly downgraded previous months’ job gains, a revision that prompted President Donald Trump to dismiss the agency’s head. Trump has been pushing for deeper and immediate rate reductions.
Bostic acknowledged that the size of the job data revisions led him to reassess economic risks, but his concerns about inflation and uncertainty regarding tariff impacts have left his policy outlook unchanged for now. He suggested businesses might need until mid-2026 to fully adjust to tariff changes, leaving inflation risks unresolved.
"My outlook for the economy is for it to continue to slow," Bostic stated, adding that whether tariffs will cause only one-time price increases or lead to persistent inflation "is perhaps the most important question we have today."
His position contrasts with that of Fed Governor Christopher Waller, who has argued that tariffs won’t lead to steady price increases and that rate cuts could begin. Waller, a potential successor to current Fed Chair Jerome Powell, dissented at the last meeting in favor of a rate cut.
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