Fed representatives give reasons to antagonize holding rates steady
(MENAFN) Federal Reserve officials Michelle Bowman and Christopher Waller have explained their dissenting votes in favor of cutting interest rates at the recent Federal Open Market Committee (FOMC) meeting held on July 29–30. Their statements were released Friday after the Fed’s decision to leave rates unchanged by a 9–2 vote.
Bowman, the Fed’s Vice Chair for Supervision, cited signs of slowing economic growth and a weakening labor market as key reasons to begin easing monetary policy. She argued that a gradual move from a mildly restrictive stance to a neutral one would help prevent further economic slowdown and labor market damage.
“There is a risk that delaying action could result in greater harm to the labor market and a deeper economic slowdown,” she said. Bowman also pointed out that inflation is nearing target levels, especially when temporary tariff impacts are excluded, and that employment is close to full capacity.
Board member Waller also favored a rate cut, saying he respected the majority’s "wait-and-see" stance on tariffs but found it too cautious and potentially reactive. He warned that any labor market deterioration could happen rapidly, leaving the Fed behind the curve.
He emphasized that the inflationary effects of new tariffs remain limited for now and recommended cutting rates immediately while continuing to monitor developments. If inflation remains contained, Waller said further rate reductions could follow at a gradual pace.
Following the Fed's decision, President Donald Trump criticized Chair Jerome Powell in harsh terms, calling him "too late, too angry, too stupid, and too political" for the role. Trump urged the Fed to act decisively and implement the policies "everyone knows have to be done."
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