The Federal Reserve (Fed) is cautiously welcoming signs of a loosening labor market and progress in lowering inflation toward its 2% target rate.

Fed Governor Christopher Waller and President of the Atlanta Fed Raphael Bostic have both expressed concerns about the timing of interest rate reductions.

Waller believes that a slowdown in demand is necessary to prevent the economy from falling off a precipice and that the most recent inflation data is “reassuring.” Bostic, however, is not in a rush to cut rates and expects inflation to gradually decline throughout the year.

Both Fed officials believe that the first rate cut should be approved in September to avoid triggering pent-up spending and putting policymakers in a position where inflation picks back up.