US Central Bank (Fed) Board Member Michelle Bowman, in her written statement, recalled that she opposed the decision of the Federal Open Market Committee (FOMC) on Wednesday to reduce the policy rate by 50 basis points to the range of 4.75-5 percent.
Bowman, who stated that he was in favor of reducing the policy rate by 25 basis points at the meeting in question, said that he accepted that it was appropriate to start reducing the policy rate considering the progress made in reducing inflation and cooling the labor market, but he was in favor of taking a smaller step as the first move in this process.
“We have not yet reached our inflation target”
Bowman noted that the U.S. economy remains strong, but inflation remains a concern despite the progress made.
“While it is important to recognize that meaningful progress has been made in reducing inflation, with core inflation remaining around or above 2.5 percent, I see a risk that the Committee’s broader policy action could be interpreted as a premature declaration of victory in our price stability mandate. We have not yet achieved our inflation objective. I believe that moving at a measured pace toward a more neutral policy stance will yield further progress in reducing inflation to our 2 percent objective.”
The Fed lowered its policy rate for the first time in four years on Wednesday, lowering it by 50 basis points to a range of 4.75-5.00 percent. The bank’s decision to cut the interest rate by 50 basis points was made by a vote of 11 to 1. Bowman was the only official who voted against the 25 basis point rate cut.
Source: www.dunya.com
