Atlanta Fed President Bostic reveals officials' eagerness to cut rates once inflation reaches 2%.

• Atlanta Fed President Raphael Bostic indicated on Wednesday that he is prepared to begin decreasing interest rates, despite inflation remaining above the central bank's objective.
• It is widely expected that the Fed will reduce its benchmark interest rate by at least 0.25% during its upcoming meeting on September 17-18.

Atlanta Federal Reserve President Raphael Bostic indicated on Wednesday that he is prepared to commence lowering interest rates, despite inflation remaining above the central bank's objective.

Bostic, previously a hawkish policymaker, is shifting his focus towards the employment side of the Fed's mandate as signs of labor market softening increase.

He wrote on the Atlanta Fed's website that waiting for inflation to fall to 2 percent before removing restrictions could cause labor market disruptions and cause unnecessary pain and suffering.

In July, the Fed's preferred measure indicated inflation at a 2.5% rate, while the core rate, excluding food and energy, was only slightly higher at 2.6%. Bostic did not specify the amount or timing of when the Fed should begin easing.

The Federal Open Market Committee of the central bank is expected to reduce its benchmark borrowing rate by at least 0.25% during its meeting on September 17-18.

As an FOMC voting member, Bostic's views add weight and assurance that the Fed will implement its first easing since the emergency measures taken in the early days of the Covid crisis.

The nonfarm payrolls report, which is expected to be pivotal, will be released two days after his comments. Bostic stated that his interactions with business leaders in the Atlanta area indicate concern about the labor market losing momentum.

"I do not detect any impending crash or panic among my business contacts. Nevertheless, the data and our grassroots feedback indicate that the economy and labor market are losing steam." He added, "The positive aspect of this is that the slowdown in activity is contributing to a steady decline in the rate of inflation."

The Fed's target for inflation is being met as the labor market moderates, according to him, who cited several factors.

He shifted his focus to both sides of the dual mandate for the first time since early 2021 due to the eroding pricing power and cooling labor market.