By Michael S. Derby
NEW YORK--Federal Reserve Bank of Atlanta President Raphael Bostic said he doesn't believe last week's rate cut was justified and would have most likely voted against it if he could have.
Referring to the private board of directors that oversees the Atlanta Fed, Mr. Bostic told reporters after a speech on Thursday that "my directors were pretty much in the hold stage [with interest rates], so that's probably where I would have come down for that meeting." He added, "my directors were pretty clear that they weren't seeing the weakness and didn't feel like an easing was really required, that the amount of risk management that had happened was sufficient."
Last week, the rate-setting Federal Open Market Committee voted to lower rates for the third time this year, moving them to between 1.50% and 1.75%. Fed Chairman Jerome Powell strongly suggested after the FOMC meeting that the Fed is done lowering rates for now and sought to offset risks posed by slowing global growth and trade uncertainty.
Other Fed officials who have spoken since the FOMC meeting have said similar things. On Wednesday, New York Fed chief John Williams said central-bank rate policy is now "positioned well" to help keep the economy growing, and "where we go from here will depend on the information we receive, what we've learned about the economic outlook."
Mr. Bostic wasn't able to lodge a formal dissent due to the rotation of voting roles each year among regional Fed bank presidents. Because of that arrangement, he'll next have a vote in 2021.
Mr. Bostic's comments to reporters came after a speech given before a gathering of the Money Marketeers at New York University. In his remarks to the audience, Mr. Bostic said he had some "sympathy" with those who have opposed Fed rate increases--the leaders of the Boston and Kansas City Fed banks voted against all three--but he also said risks to the economy are real and must be taken into account.
"I do think that the economy today is on solid footing and is likely to remain so," he said.
With that outlook in mind, "the Fed's current stance is, if anything, a bit accommodative," Mr. Bostic said. When it comes to the outlook for short-term rate changes, he said "I am fairly comfortable standing pat with policy and strongly favor weighing the incoming data, both macro and micro, over the coming months before deciding on any further adjustments."
Mr. Bostic noted that some of the risks that have loomed large to the Fed haven't been as big a deal when his bank talked to firms in the Atlanta Fed's territory.
When it comes to trade uncertainty, "the feedback I receive and the survey evidence my staff analyzes suggest that it is largely a nonissue for most firms," Mr. Bostic said.
"Trade policy's impact on the business sector as a whole remains modest, slowing capital expenditures by a few percentage points and leading to a small change in overall employment," Mr. Bostic said. Additionally, "the trade situation has remained murky, firms affected by tariff increases have also indicated they have adjusted supply chains and taken other steps to mitigate tariffs."
Mr. Bostic said that one key thing to watch is what happens if trade tariffs do get passed on and consumers face big price increases.
He also said the biggest concern for local firms is the ability to find and retrain workers.
Write to Michael S. Derby at email@example.com