By Howard Schneider

WASHINGTON (Reuters) – Risks to the job market have increased, but Atlanta Fed President Raphael Bostic stated it is too early to commit to interest rate cuts ahead of the U.S. Federal Reserve’s upcoming meeting. Key data remains pending, and inflation is anticipated to rise in the coming months.

Bostic expressed that he believed a single quarter percentage point rate cut would likely be appropriate this year, noting that much data regarding inflation and employment is forthcoming. He emphasized that the employment numbers indicate higher risks than previously.

The Federal Reserve’s next meeting is scheduled for September 16-17, where a quarter-point policy rate cut is expected after holding rates steady at 4.25% to 4.5% for the past five meetings. President Donald Trump has been advocating for substantial and immediate rate reductions.

Employment growth decelerated, and the unemployment rate increased in July, with new Bureau of Labor Statistics data showing significant downgrades to previous job gains. This prompted Trump to dismiss the head of the agency.

Bostic noted the revisions have led him to reconsider the risks facing the economy but maintained his concerns about inflation and the uncertainty surrounding tariff impacts. He indicated it might take until mid-2026 for businesses to fully adapt to tariff changes, leaving inflation risks unresolved.

Bostic forecasts continued economic slowing but regards the impact of tariffs on price stability as crucial. While some Fed members, including Governor Christopher Waller, do not foresee tariffs leading to sustained price rises, Bostic is cautious about public expectations being reset, potentially driving prices higher. He suggested skepticism towards traditional economic models regarding tariffs.

Overall, Bostic reiterated that upcoming data would significantly influence the near-term policy outlook, with fresh consumer price data expected next week, along with further inflation measures and the August jobs report ahead of the next meeting.