Near-normal economy, sustainable path to price stability

Atlanta Federal Reserve President Raphael Bostic talks about the economic outlook and monetary policy at the University of London. His dovish comments align with the Federal Reserve’s (Fed) latest decision to cut its benchmark interest rate by 50 basis points (bps).

Key recommendations

“Businesses are becoming more careful in hiring, but they are not considering layoffs.”

“The economy is effectively close to conditions that would be considered normal.”

“Price increases have moderated and been concentrated in housing.”

“Risks to the labor market have increased, with the possibility of broader weakness than a year ago.”

“A half-point cut at this meeting does not lock in a cadence for future rate cuts.”

“Recent data show convincingly that the US is on a sustainable path to price stability.”

“Business leaders say pricing power has evaporated.”

“Recently low levels of some recent inflation indicators bode well.”

“The Fed now faces two largely balanced risks.”

Market reaction

The US dollar (USD) remained under mild selling pressure following the news, but barely reacted as focus remains on United States (US) PMI figures due after the Wall Street open.