Fed’s Bostic sees potential for soft landing as labor market loosens gradually

• Wage growth pulling back to level more conducive to price stability
• Business contacts point to a loosening but still broadly stably labor market
• Labor market conditions to weaken, but not weak
• Am now giving equal attention to maximum employment objective as inflation
• Fed must stay vigilant to ensure inflation risks continue to wane
• Am not quite prepared to declare victory over inflation as risks remain
• Price pressures are diminishing quickly and broadly
• No panic among my business contacts but describe an economy and labor market losing momentum
• Most recent inflation reports bolster my confidence inflation likely on sustainable path to 2%
• Soft landing for economy may be within reach
• Fed is in a generally favorable position
• We must not maintain a restrictive policy stance for too long

Bostic has been hawkish but there is a dovish shift here, though I don’t see any sign of a rush to cut by 50 bps.

This article was written by Adam Button at www.forexlive.com.