There are some body composition goals that require almost anyone to reduce body fat while building lean muscle. Like, if you want shredded abs, you'd need to reduce the layer of fat around those muscles. Same deal with your butt. But, for most people, excess body fat doesn't go to the arms, so leaning down before you get jacked isn't always necessary for this particular goal.
That said, it could be the case for you if you have what would be considered a relative excess amount of body fat for a given body composition goal (in this case, more than about 15% body fat for men and about 25% for women), explains Brian St. Pierre, MS, RD, CSCS, director of performance nutrition at Precision Nutrition. That excess fat may hide the shape of the muscle underneath, plus it can interfere with some hormonal and physiological processes making it harder to gain muscle. In those cases, you'd want to try to reduce body fat as part of your quest for jacked arms. For more info on how to do that, check out our previous reporting on the subject.