Bostic Indicates Fed May Consider Skipping Rate Cuts in November

Atlanta Federal Reserve President Raphael Bostic expressed on Thursday that he is open to the possibility of a smaller rate cut of a quarter point or even maintaining the current rate, depending on the persistence of recent stronger inflation and labor market conditions.

In an interview on Thursday, Bostic stated, “I am totally comfortable with skipping a meeting if the data suggests that’s appropriate.” His comments followed data indicating that the September consumer price index (CPI), a key measure of inflation, exceeded expectations.

The CPI was recorded at 0.2% in September, unchanged from August but higher than the anticipated 0.1%. This adjustment brought the annual inflation rate through August to 2.4%, a slight decline from August’s 2.5%, but still above the expected figure of 2.3%.

This unexpected inflation report came on the heels of a September payrolls report that significantly outperformed estimates, prompting many analysts to reevaluate their expectations regarding a potential half-point rate cut at the Fed’s forthcoming November meeting.

The recent stronger performance of inflation and job gains marked the first upside surprises in five and two months, respectively. Bostic noted that the volatility in the data could indicate a need to “pause in November,” adding, “I’m definitely open to that.”

He emphasized, “I think we have the ability to be patient and wait and let things play out a little longer…. There are elements of today’s report which I think validate that view,” highlighting his cautious stance on future monetary policy adjustments.