Atlanta Federal Reserve Bank President Raphael Bostic said Tuesday that the Fed should be willing to explore more significant rate cuts if the labor market deteriorates. The Fed’s Bostic also assured markets that his business contacts continue to say they do not expect layoffs, an ill-timed statement that comes on the heels of early Tuesday’s ISM data showing a deteriorating employment outlook in the U.S. manufacturing sector. USA
Highlights
Recent PCE data shows that disinflation is still ongoing.
Business contacts continue to say they do not expect layoffs.
Will be watching upcoming employment data closely.
If job growth slows much below 100K positions, a closer questioning of what is happening would be warranted.
You don’t want to be too confident on inflation given that the underlying personal consumption expenditure price index is still 2.7%.
The base case is an ‘orderly’ slowdown with inflation expected to continue to decline and the labor market to hold.
Bostic is open to another half-percentage point rate cut if the labor market shows unexpected weakness.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
