Weakening Data Sees Bostic Push Back On Sept Taper Decision

Like fellow FOMC participants Kaplan and Bullard, Atlanta Fed Pres Bostic hasn't significantly changed his mind on taper / hiking timeline since the weak August nonfarm payrolls release, continuing to look for a taper this year with hikes by late 2022.

• But he's explicitly pushed back on a decision at the September meeting in this morning's WSJ interview ("I wouldn't lean in too heavily to expecting anything on taper at the next meeting"), which makes it increasingly likely that we won't see a decision at the next FOMC.
• The August payrolls disappointment, among other weaker late-summer data, has made a difference in his thinking. ("As strong as the data was coming in in the early part of the summer, I was really very much leaning into advocating for an earlier start than what many may have expected...the weaker data that we've seen more recently suggests to me that maybe there's a chance for some play on this.")
• Note that Bostic's stated unemployment "substantial further progress" criteria for tapering has been closing half of the payroll gap since December 2020, so about 5 million jobs (of 10mn drop from the Feb 2020 peak) - we're now at 4.7 million jobs created in Jan-Aug. If the August nonfarm payrolls report had come in line with consensus instead of missing by 500k, perhaps he'd have been more willing to go along with the more hawkish participants in calling for a taper at the September meeting.
• That said, his medium-term outlook appears to be more or less unchanged, and the September payrolls data (due out Oct 8) is likely to see his unofficial threshold achieved.

Source: BLS, MNI Calculations