WASHINGTON, Nov 1 \u2014 A senior member of the US Federal Reserve on Friday said he voted against cutting interest rates this week because inflation was \u201ctoo high\u201d for comfort.<\/p>\n
Kansas City Fed president Jeff Schmid was one of two people who dissented on Wednesday\u2019s vote, at which the US central bank backed a quarter percentage-point rate cut.<\/p>\n
The other dissent was Fed governor Stephen Miran, who wanted a larger rate cut.<\/p>\n
\u201cThe labour market is largely in balance, the economy shows continued momentum, and inflation remains too high,\u201d Schmid said in a statement.<\/p>\n
\u201cI view the stance of policy as only modestly restrictive,\u201d added Schmid, who has a vote on the Fed\u2019s rate-setting committee this year. \u201cIn this context, I judged it appropriate to maintain the policy rate at this week\u2019s meeting.\u201d<\/p>\n
US consumer inflation data came in hot at 3.0 per cent in the 12 months to September, though the Fed uses a different measure that is also stuck above the two-percent target.<\/p>\n
The Fed\u2019s rate decision brought interest rates down to between 3.75 per cent and 4.00 per cent, easing the burden slightly on businesses and consumers looking to borrow money.<\/p>\n
Speaking to reporters on Wednesday after the decision was published, Fed chair Jerome Powell said that while there had been broad agreement on a cut this time, there was less clarity on what would happen next.<\/p>\n
\u201cThere were strongly differing views about how to proceed in December,\u201d he said. \u201cA further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.\u201d<\/p>\n
Speaking in Washington on Friday, President Donald Trump\u2019s top economic advisor sounded a different note on the health of the world\u2019s largest economy, flagging the recent consumer inflation data which came in slightly below expectations.<\/p>\n
\u201cWe\u2019re glad that they reduced the interest rate,\u201d Kevin Hassett, the director of Trump\u2019s National Economic Council, told reporters.<\/p>\n
\u201cThe Fed is flying blind a little bit, but we have a government shutdown, which is a negative for the economy,\u201d he said.<\/p>\n
\u201cAnd against that backdrop, the idea that the Fed would be backing away from their promised rate reductions in the future is puzzling to us.\u201d<\/p>\n
Among the 10-2 majority voting for a quarter-point cut this week was Fed governor Christopher Waller, a Trump nominee who is on the five-person shortlist to take over from Powell when he steps down as Fed chair next May.<\/p>\n
\u201cAll of our forecasts have inflation coming back down the target,\u201d he told Larry Kudlow on Fox Business on Friday.<\/p>\n
\u201cYes, it\u2019s high, it\u2019s been high, but it\u2019s fully coming back. And the biggest concern we have right now is the labour market,\u201d he said.<\/p>\n
\u201cSo this is why I\u2019m still advocating we cut policy rates in December, because that\u2019s what all the data is telling me to do.\u201d<\/p>\n
Futures traders slashed their expectations of a December rate cut, and now see only a 65 per cent probability of a quarter-point move in December, according to CME Group data. \u2014 AFP<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON, Nov 1 \u2014 A senior member of the US Federal Reserve on Friday said he voted against…\n","protected":false},"author":2,"featured_media":254780,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,44963,164,150588,1073,56692,150589,97019],"class_list":["post-254779","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-christopher-waller","tag-economy","tag-jeff-schmid-dissent","tag-jerome-powell","tag-stephen-miran","tag-us-consumer-inflation","tag-us-federal-reserve-interest-rate-cut"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/254779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=254779"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/254779\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/254780"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=254779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=254779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=254779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}