Bloomberg St. Louis Fed President James Bullard issued a statement Friday explaining his dissent at this week’s Federal Open Market Committee meeting, saying he wanted a more aggressive half-point cut due to signs the economy is slowing down.
At the end of its two-day meeting, the FOMC voted 7-3 to trim rates by a quarter-point to a range between 1.75% and 2%.
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In his statement, Bullard said a half-point cut would have been a more appropriate action given “signs that the U.S. economic growth is expected to slow in the near horizon.”
“Trade policy uncertainty remains elevated, U.S. manufacturing already appears in recession and many estimates of recession probabilities have risen from low to moderate levels,” Bullard said.
Bullard said the half-point rate cut would have provided insurance against slow growth and help stabilize inflation
“It is prudent risk management, in my view, to cut the policy rate aggressively now and then later increase it should the downside risk not materialize,” Bullard said.
The St. Louis Fed president said he remained “confident “ in the Fed’s decision-making.
During his press conference on Wednesday, Fed Chairman Jerome Powell was more upbeat about the outlook.
“We don’t see a recession,” Powell said.
The most likely case is for “continued moderate growth, continued strong labor market, and inflation moving back up to 2%,” he added.
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U.S. stocks DJIA, -0.19% were set to open higher on Friday after they were near unchanged on Thursday as investors ponder the Fed’s next moves.
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