Atlanta Fed President Raphael Bostic emphasized a cautious approach regarding interest rate cuts, stating that he needs “a little more data” before supporting such a move. Bostic stressed the importance of ensuring that Fed doesn’t prematurely lower rates, saying, “We want to be absolutely sure.” He warned that it would be problematic if Fed cut rates and then had to reverse course by raising them again.

While Bostic acknowledged being encouraged by recent inflation readings, he reitereated that he might be ready to support a rate cut “by the end of the year.” However, he remains watchful of labor market dynamics, expressing concern over the rise in unemployment. Bostic clarified that this increase is largely due to a growing labor force rather than a decline in demand, which he considers a “good problem to have.”

Fed Governor Michelle Bowman noted during a Saturday event that her “baseline” expectation is for inflation to decline further under the current policy stance. She added that if incoming data shows inflation moving sustainably toward the 2% target, it could become appropriate to “gradually lower the federal funds rate.” This would prevent monetary policy from becoming “overly restrictive” on economic activity and employment.

However, Bowman stressed that monetary policy is “not on a preset course,” with decisions to be guided by data. By the time of Fed’s September meeting, the committee will have additional economic data, including one employment and two inflation reports, as well as a broader view of financial conditions.

She acknowledged that while equity prices have been “volatile” recently, they remain “still higher than at the end of last year,” indicating resilience in financial markets.

Despite some progress, Bowman expressed concerns that inflation remains “somewhat elevated” with “some upside risks.” She emphasized the need to “pay close attention to the price-stability side of our mandate,” while also monitoring for any significant weakening in the labor market.

Full remarks of Fed’s Bowman here.

Boston Fed President Susan Collins indicated in an interview with the Providence Journal that if current economic data trends continue as expected, it may soon be appropriate to start adjusting monetary policy by “easing how restrictive the policy is”.

She emphasized her expectation for “continued gradual reduction” in inflation toward the 2% target, all while maintaining a healthy labor market.

Collins also noted that she anticipates interest rates to be lower in the coming years, although she refrained from providing specific details on the timing and pace of rate cuts.

She highlighted the importance of incoming data before Fed’s September meeting, stating, “We’ll have more data before our September meeting, and I don’t want to get out ahead of that.”

In her assessment, Collins remains confident in the economy’s current growth pace, which she believes should help sustain a strong labor market.

Kansas City Fed President Jeff Schmid acknowledged that while inflation is nearing the Fed’s 2% target, currently at around 2.5%, “we are still not quite there.”

Nevertheless, “if inflation continues to come in low, my confidence will grow that we are on track to meet the price stability part of our mandate, and it will be appropriate to adjust the stance of policy,” Schmid said at a bankers’ event overnight.

Despite fears sparked by a weak jobs report, Schmid pushed back against the notion that Fed would need to take aggressive action to avoid a recession. He described the economy as resilient, with strong consumer demand and a labor market that, although cooling, remains “quite healthy.”

Schmid noted that Fed’s current policy stance “is not that restrictive” and suggested that further cooling in the labor market may be necessary to achieve additional declines in inflation.

Chicago Fed President Austan Goolsbee reiterated concerns about the current stance of monetary policy in a Fox interview, warning that maintaining high borrowing costs, even as inflation declines, could further tighten financial conditions and potentially harm the labor market. Goolsbee stressed the importance of balancing monetary policy to avoid unnecessary damage to employment.

He also made it clear that Fed’s decisions are driven solely by economic considerations, not by the stock market or political factors. Goolsbee stated, “The Fed’s out of the election business. The Fed is in the economic business,” emphasizing that the focus remains on maximizing employment and stabilizing prices.

Richmond Fed President Tom Barkin expressed optimism about the ongoing disinflation trend during a virtual event overnight.

Barkin noted that recent data has been encouraging, both in overall levels and across various inflation components, stating that “all the elements of inflation seem to be settling down.” He remains “relatively hopeful” that this trend will persist.

Barkin also highlighted that the current economic environment provides some leeway to assess whether the economy is gradually normalizing, which would allow for a steady and deliberate approach to rate adjustments. He pointed out the importance of determining if further aggressive action is necessary, depending on how the economy evolves.