(Finance) – “While it is important to recognize that there has been significant progress in lowering inflation, while core inflation remains around or above 2.5 percent, I see a risk that the Committee’s broader action could be interpreted as a premature declaration of victory on our price stability mandate.” He said Michelle Bowmanwho sits on the Federal Reserve Board of Governors, in explaining why she was the only one to vote differently at the Fed meeting on Wednesday, when a majority voted for a 50 basis point cut.
As it emerged in the post-meeting statement of the committee, Bowman would have preferred to lower the target range on interest rates. 25 basis points.
“Given the progress we have seen since mid-2023 in both lowering inflation and cooling the labor market, I agree that it was appropriate to recalibrate at this meeting the rate level and begin the process of moving towards a more neutral policy stance,” he explained. “In my view, however, a smaller first move in this process would have been a preferable action.”
“We have not yet reached our inflation target,” Bowman said. “I think that move at a measured pace towards a more neutral policy stance will ensure further progress in bringing inflation to our 2 percent target. This approach would also avoid unnecessarily fueling demand.”
(Photo: @ Shutterstock)