Federal Reserve Bank of Atlanta President and Chief Executive Officer Raphael Bostic said he supports the Federal Open Market Committee’s decision to reduce the Federal Reserve’s policy rate.
The FOMC opted to lower the rate from the five-and-a-quarter to five-and-a-half percent range that it has held for more than a year. It also reduced the target by a full one-half percentage point.
“Though not a total surprise, this was a larger adjustment than some expected,” Bostic said in virtual remarks to the European Economics and Financial Centre. “…Specifically, in my judgment, we have made sufficient progress on inflation, and the labor market has exhibited enough cooling, that the time has come to shift the direction of monetary policy to better reflect the more balanced risks to our price stability and maximum employment mandates that have emerged over the course of the year.
“In fact, progress on inflation and the cooling of the labor market have emerged much more quickly than I imagined at the beginning of the summer,” Bostic added. “In this moment, I envision normalizing monetary policy sooner than I thought would be appropriate even a few months ago. By ‘normalizing,’ I mean returning our policy to a place where it is no longer necessary to promote restrictive financial conditions to achieve our inflation target.”