Fed governor explains dissent from 50 basis point rate cut

Published On Sep 20, 2024, 4:19 PM

Federal Reserve Governor Michelle Bowman expressed her dissent regarding the recent 50 basis point interest rate cut, which she felt was too large, advocating instead for a smaller 25 basis point cut. The decision to lower the federal funds rate target range from 5.25%-5.5% to 4.75%-5% was made by the Federal Open Market Committee (FOMC) due to progress in lowering inflation towards the Fed's 2% target and a strong albeit softening labor market. Bowman noted that the economy remains strong and inflation is still above the target, suggesting a more cautious approach to rate cuts to help stabilize prices and avoid stimulating excessive demand.