Federal Reserve officials voice cautious stance against excessive interest rate cuts.
according to The Wall Street Journal, on Friday local time, four Federal Reserve officials expressed concerns in different forms about the possibility of a rate cut this week and another one in December. This explains why Federal Reserve Chairman Powell stated after the decision at the press conference that a rate cut in December is not a "done deal." In Wednesday's meeting, only Kansas City Fed President Esther George voted against the decision to cut rates by 25 basis points, citing concerns about sticky inflation in her statement on Friday. Two other officials without voting rights this year—Cleveland Fed President Loretta Mester and Dallas Fed President Robert Kaplan—also hinted that they would oppose a rate cut if they had the voting power. Mester openly expressed concerns that this rate cut deviates too much from the restrictive stance needed to contain inflation: "We must maintain a certain level of restrictive policy to bring inflation back to target." Atlanta Fed President Raphael Bostic, also without voting rights this year, supported the 25 basis point rate cut but emphasized that it should only happen if the policy stance remains restrictive. Bostic specifically pointed out that as stubborn inflation persists in various sectors of the economy, each rate cut makes the reasons for further easing less clear, as interest rates are gradually approaching a neutral level that is difficult to effectively contain rising prices.
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