Fed's Bostick: Open to a rate cut next month, the Fed can't "be late"

Atlanta Fed Chair Bostick is open to a rate cut next month, saying the Fed "can't afford to wait too long" to loosen monetary policy, in an interview.

“Now that inflation is back to normal, we have to look at the other side of the coin, which is we've seen the unemployment rate jump significantly from its lows,” said Bostick, a voting member of the Federal Open Market Committee.

“But it does make me think about when is the right time, so I'm willing to act before the fourth quarter.”

Bostick said waiting for a rate cut was risky. “Because our policy is lagging in both directions, we really can't afford to wait. We have to act as quickly as possible.”

His shift in stance comes as the consumer price index rose at an annualized rate of 3% or less for the first time since March 2021, which he called a “very, very positive signal.”

Other Fed officials also lean toward supporting a September rate cut. According to the FedWatch tool on the Chicago Mercantile Exchange, the probability of a 25-basis-point cut next month is 70.5%, while the probability of a 50-basis-point cut is 29.5%. A week ago, the probability of a 25-basis-point cut was 49%, while the probability of a 50-basis-point cut was 51%.