Fed’s Bowman shares why she voted against rate cut

Federal Reserve Governor Michelle Bowman said she was the only Federal Open Market Committee member to vote against the rate cut. In a speech before the Kentucky Bankers Association, she shared that she preferred a smaller rate cut of 25 basis points rather than 50 basis points.

“I was concerned that reducing the target range for the federal funds rate by 1/2 percentage point could be interpreted as a signal that the Committee sees some fragility or greater downside risks to the economy. In the current economic environment, with no clear signs of material weakening or fragility, in my view, beginning the rate-cutting cycle with a 1/4 percentage point move would have better reinforced the strength in economic conditions, while also confidently recognizing progress toward our goals. In my mind, a more measured approach would have avoided the risk of unintentionally signaling concerns about underlying economic conditions.”

See Bowman’s full speech here.