We’ll be keeping a close eye on Friday’s jobs report

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic noted on Monday that the Fed could justify further deep cuts if the US labor market shows unexpected weakness.

Key highlights

I am open to another half percentage point rate cut if the labor market shows unexpected weakness.

The case is for an “orderly” easing, with inflation expected to continue to slow and the labor market to hold up.

I don’t want to be too bullish on inflation, given that the core price index for personal consumption expenditure remains at 2.7%.

Business contacts continue to say they don’t expect layoffs.

I will keep a close eye on future job data; if employment growth slows well below 100,000 jobs, it would warrant a closer questioning of what is happening.