FED: Bostic - Loosening Mon Pol Prematurely Is A Dangerous Gambit

Atlanta Fed's Bostic ('24 voter), at the hawkish end of the FOMC spectrum, said the central bank’s two mandates — stable prices and maximum employment — are now in balance for the first time since 2021, though he added he is “not quite prepared” to declare victory over inflation.

• “Though they have declined significantly, risks to meeting our price stability mandate remain,” Bostic said in an essay released Wednesday by the Atlanta Fed. “We must stay vigilant to ensure those risks continue to wane.”
• “History shouts to us that loosening monetary policy prematurely is a dangerous gambit that can rekindle inflation and entrench it in the economy for many months or even years,” he said.

Recall that on Aug 29, he said it may be time” to cut but he’s still looking for additional data to support lowering rates in September. He reiterated his timeline for anticipated cuts had moved up after inflation fell more quickly than he expected and the unemployment rate increased more rapidly, but he remained cautious. “I don’t want us to be in a situation where we cut and then we have to raise rates again”.