Raphael Bostic, President of the Federal Reserve Bank of Atlanta expressed his views on a potential rate cut on Wednesday. However, Bostic expressed caution on the move.

What Happened: Bostic acknowledged that the inflation rate has decreased more than expected, while the unemployment rate has risen. This has led him to contemplate a rate cut, as reported by Reuters.

He emphasized the need for further confirmation from upcoming economic reports before the Fed’s meeting in September.

“I don’t want us to be in a situation where we cut, and then we have to raise rates again: that would be a very bad outcome,” Bostic said. He also expressed a preference for waiting longer to ensure a stable economic trend.

Despite the current policy rate being maintained in the 5.25%-5.50% range for over a year to counter high inflation, Bostic is now open to the idea of initiating rate cuts earlier.

This shift in stance follows Fed Chair Jerome Powell’s signal that it’s time to adjust monetary policy, based on the evolving economic data.

Why It Matters: Bostic’s remarks are in line with a global trend of central banks considering interest rate cuts to stimulate economic recovery. This shift in monetary policy was first hinted at by Powell at the Jackson Hole Symposium and has since been echoed by officials from the European Central Bank and other leading central banks.

These potential rate cuts are a response to the ongoing economic recovery from the pandemic’s inflationary effects, as highlighted by Mary Daly, President of the San Francisco Federal Reserve.

Notably, Bostic had earlier said that his expectation was that the U.S. central bank would need to cut rates just once in 2024, tentatively in the fourth quarter.

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This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal