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federal reserve hawkish official bostic recently said that he has shifted the focus to the central bank's "dual mission" and mentioned that he is ready to start lowering interest rates.

on wednesday (september 4th) local time, bostic published an article on the official website of the atlanta fed stating that the federal open market committee (fomc)'s dual mission - price stability and full employment - has reached a balance for the first time since 2021.

source: atlanta fed official website

but he added that he was “not quite ready” to declare victory over inflation and that “while inflation has fallen noticeably, risks to achieving our price stability mandate remain. we must remain vigilant to ensure that these risks continue to abate.”

“history tells us that easing monetary policy too soon is a dangerous strategy that could reignite inflation and keep it plaguing the economy for months or even years,” bostic wrote.

but he also pointed out thatif the central bank waits until inflation falls back to 2% before reducing policy restrictions, the labor market will face certain risks, which may disrupt the labor market and cause unnecessary pain and hardship.

bostic added that recent price reports had strengthened his confidence that inflation was now on a path “sustainably returning to our 2% objective” and that price pressures were easing rapidly and broadly.

last month, after the u.s. unemployment rate triggered the "sam rule," many fed officials began to turn to support rate cuts, but bostic "still wanted to see more data." as this year's rotating voting committee, he has a key vote in the remaining three interest rate meetings this year.

referring to current labor data and information, bostic said he believed the job market "has eased somewhat, but remains roughly stable" and that "the labor market is becoming a little weaker than before, but it is not objectively weak."

u.s. job openings data for july, released shortly before press time, fell to the lowest level since early 2021, and layoffs increased, which is consistent with other previous signs of slowing labor demand.

bostic believes that workers are under less pressure to compete for jobs, which will cool wage growth and reduce the urge of companies (especially in the service industry) to raise wages to compensate for labor. "more broadly, the pricing power of companies seems to be weakening."

"rest assured, i see no signs of an imminent collapse or panic in the business community," he wrote. "while the data and our feedback suggest that the economy and labor market are losing momentum," that "is a welcome development."

“given the situation we face, with eroded pricing power and a cooling labor market, for the first time in 2021 i am rebalancing my attention toward both aspects of my dual mandate.”