Federal Reserve Board Member Michelle Bowman noted on Tuesday that she dissented from the Fed's decision to cut interest rates by 50 basis points last week as she believed that a smaller first move of 25 basis points would have been a preferable action.
The official warned about risks that the outsized cut by the Fed could be interpreted as a premature declaration of victory on its price stability mandate. "Accomplishing our mission of returning to low and stable inflation at our 2 per cent goal is necessary to foster a strong labour market and an economy that works for everyone in the longer term,” she noted.
Bowman also stressed that she thinks that moving at a measured pace toward a more neutral policy stance will ensure further progress in returning inflation to the Fed's 2% target. "This approach would also avoid unnecessarily stoking demand," she added.