As the December Federal Reserve policy meeting approaches, Fed officials have revealed that any decision to cut interest rates will depend on upcoming economic data, particularly the November employment report. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, stated on Monday that he is open to the possibility of another rate cut, emphasizing that employment data will play a crucial role in this decision.
Bostic told reporters, "Uncertainty remains high, and I will not attend this meeting with a predetermined stance." He specifically mentioned that the November employment report, expected to be released on Friday, will be one of the decisive factors. He also noted that even though inflation seems to be declining, the Fed needs to be cautious when adjusting interest rates to avoid negatively impacting the labor market with premature cuts.
Meanwhile, John Williams, President of the Federal Reserve Bank of New York, remarked during an event on Monday that with easing inflation pressures, the Fed might further lower the benchmark interest rate in the future. He indicated that monetary policy needs to remain restrictive to help bring inflation back to the 2% target. Williams also predicted that the U.S. economy would grow by 2.5% or more this year, with unemployment holding between 4% and 4.25%, and an inflation rate expected at 2.25%.
Although neither Fed president explicitly endorsed a rate cut at this month's FOMC meeting, they agreed that the direction of monetary policy will rely on forthcoming economic data. Currently, the Fed's target range for the benchmark interest rate is 4.5%-4.75%.
Williams concluded, "If the past five years have taught us anything, it's that the economic outlook remains highly uncertain. Therefore, we will continue to adjust policies based on data." Markets will closely monitor the soon-to-be-released employment data to predict the Fed's future monetary policy direction.
