Expectations that the Fed will cut interest rates at its December meeting have made the rift within the central bank clear.
Fed member Laurie Logan remained hawkish in December, saying she did not support further rate cuts. Mr. Logan also emphasized the risk of higher inflation at the October meeting and opposed cutting interest rates.
Logan said in a statement that inflation remains above target and continues its upward trend.
“Looking at the December meeting, I have a hard time supporting further rate cuts unless we see strong evidence that inflation is falling faster than I expected or that the labor market is cooling much more than a modest slowdown.”
Meanwhile, fellow Fed board member Stephen Milan took a more dovish stance, arguing that recent statistics provide a strong case for cutting rates. In his Nov. 15 assessment, he said all economic indicators released since the September meeting point to a more generous policy stance.
Milan noted that while the labor market weakened significantly, inflation was better than expected.
“All the data we have received supports a dovish attitude. In these circumstances, we need to become more dovish, not the other way around.”
*This is not investment advice.
