Bankinter | Atlanta Fed President Bostic said that with inflation moving back towards target and unemployment levels slightly above what they anticipated, it makes the most sense to implement the first rate cut at the September 18 meeting.
However, he added that before taking any decision, the two remaining inflation data until the meeting (PCE and CPI) and above all the employment data (6 Sept.) will be crucial. Under this umbrella, he said that if the Fed makes a mistake, it will be to keep rates high for longer. Not of lowering them and then having to raise them again for having eased monetary policy too soon.
Opinion: Rather hawkish tone cooling somewhat the market outlook in the short term which currently expects -100bp.currently expects -100 b.p. of cuts in 2024, which in our view is excessive. The focus of the speech is on the labour market and the pace of labour market cooling, so all attention will be focused on the Payrolls figures to be released on Friday 6 September.
