Fed’s Bowman explains dissent. Says she would have preferred a smaller rate cut

• Sees progress on inflation and labor market cooling since mid-2023
• Believes smaller initial move preferable to avoid premature victory declaration
• I see the risk that the Committee’s larger policy action could be
  interpreted as a premature declaration of victory on our price stability
  mandate
• Although hiring appears to have softened, layoffs remain low
• Consumer spending reflects a healthy economy
• US economy remains strong with solid growth and near full employment
• Labor market normalizing but measurement challenges create uncertainty
• Inflation still above 2% target, core PCE above 2.5% y/y
• Argues for measured pace toward neutral policy to ensure further inflation progress
• Committed to working with FOMC colleagues despite disagreement on cut size

It’s normal for dissenters to publish essays or statements to explain themselves. Hers was the first dissent by a Fed Governor since 2005 but isn’t particularly impactful in terms of policy. She is going to support ‘moving at a measured pace’ towards neutral going forward.

This article was written by Adam Button at www.forexlive.com.