In a speech today, Atlanta Fed President Raphael Bostic shed light on his support for last week’s 50bps rate cut, citing faster-than-expected improvements in inflation and labor market cooling.
“Progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,” Bostic remarked. He now sees a path to normalizing monetary policy sooner than anticipated.
Bostic acknowledged that his “residual concern” about inflation could have led him to favor a smaller reduction. However, a 25bps cut “would belie growing uncertainty about the weakening of the labor market,” he added.
