10:04 AM EDT, 09/04/2024 (MT Newswires) -- As employment conditions have softened and inflation is moving closer to target, the focus is more now balanced between both sides of the Federal Open Market Committee's dual mandate, Atlanta Federal Reserve Bank President Raphael Bostic, a voter on the FOMC in 2024, wrote Wednesday in an essay posted to the Atlanta Fed's website.

Bostic did not offer any policy expectations for the upcoming Sept. 17-18 FOMC meetings but suggested that the risks to the mandate are now in better balance.

"I have focused mainly on the price stability side of the mandate since inflation spiked in 2021, as we were clearly further from that goal than from the goal for maximum employment," Bostic wrote. "But as the labor market has cooled in recent months, the balance of risks has shifted, and I am today giving basically equal attention to the maximum employment objective."

Bostic said that the labor market "continues to weaken, but it is not weak," noting that the unemployment rate, currently at 4.3%, is just slightly above the FOMC's long-term expectation of 4.2%.

At the same time, the pace of inflation, while still above the 2% target, has slowed considerably, Bostic said.

"The headline (inflation) rate has fallen by about two thirds since peaking in June 2022," Bostic said. "Further, the most recent monthly reports bolster my confidence that inflation is likely on a sustainable path to the committee's 2% objective, measured by the personal consumption expenditures price index, the committee's preferred gauge."

Though both inflation and employment have slowed, business contacts do not indicate concern of an impending crisis but rather a loss of momentum, Bostic added.

When making policy decision, the FOMC will need to balance waiting too long versus acting too quickly to loosen policy, but Bostic also said that it is too early to say that victory over inflation has been achieved.

"Though they have declined significantly, risks to meeting our price stability mandate remain," Bostic said. "So, we must stay vigilant to ensure those risks continue to wane. After all, history shouts to us that loosening monetary policy prematurely is a dangerous gambit that can rekindle inflation and entrench it in the economy for many months or even years."

At the same time, though, there are dangers to keeping policy restrictive beyond what is needed, Bostic said.

"I believe we cannot wait until inflation has actually fallen all the way to 2% to begin removing restriction because that would risk labor market disruptions that could inflict unnecessary pain and suffering," Bostic said. "Right now, I think we are in a generally favorable position."