Raphael Bostic, the President of the Atlanta Federal Reserve, has accelerated his timeline for potential interest rate cuts. In an interview with Yahoo Finance, he indicated that September or November could be viable months for these reductions. Initially, Bostic had predicted a single rate cut in the fourth quarter, but recent data on inflation and the labor market have influenced his perspective.

Bostic noted that inflation has decreased more rapidly than anticipated, and the labor market has shown significant weakness. This suggests that it may be appropriate to advance the start of rate adjustments. He expressed receptiveness to a move in the third quarter, either in September or November, with a 25 basis point cut being the most suitable approach.

Bostic’s remarks followed a speech by Fed Chair Jerome Powell at the Jackson Hole symposium, where Powell signaled that interest rate reductions are imminent. Powell did not specify the timing or magnitude of the initial cut, stating that it would depend on incoming data and evolving economic conditions.

Philadelphia Fed President Patrick Harker also expressed his expectation for a 25 basis point cut, remaining open to a more significant reduction if the labor market weakens unexpectedly. Bostic emphasized the importance of monitoring the labor market, as a deterioration in hiring trends could alter the Fed’s strategy.

Market expectations for a larger cut in September increased, with traders now estimating a 34.5% likelihood of a 50 basis point reduction by the end of the meeting. Loretta Mester, a former Cleveland Fed president, suggested a 25 basis point cut as a reasonable baseline, avoiding a 50 basis point cut to signal that the Fed is not lagging behind.

Overall, Bostic’s comments reflect the Fed’s cautious approach to rate cuts, balancing the need to address inflation with the risk of economic instability.