Fed officials outline divisions over December rate cut amid inflation and labor concerns

Federal Reserve officials on Friday explained their opposition to the central bank’s decision this week to cut interest rates by a quarter of a percentage point, saying views had splintered over the risks from inflation and a softening labor market. The central bank voted to cut rates by a quarter point for a third meeting in a row.

Two members of the Federal Open Market Committee voted for no cut, and four registered what the Fed calls a "soft dissent" by penciling in forecasts for year-end rates above the current 3.5 to 3.75 percent. Stephen I. Miran, who joined the Fed’s Board of Governors in September after being nominated by President Trump, voted instead for a half-point cut.

Austan D. Goolsbee, who cast one of the votes against a cut, cited worries about inflation and said he would have waited for more data. Officials said their view was complicated by limited data because a government shutdown delayed economic releases; the last monthly jobs report the Fed had was from September and showed stronger monthly jobs growth but higher unemployment.

Jeffrey R. Schmid reiterated concerns about lingering price pressures, and Beth Hammack said inflation has been stuck about a percentage point above the Fed’s 2 percent target. Officials said further action would probably be prompted by signs the labor market was close to cracking.

Key Topics

Business, Federal Reserve, Jerome Powell, Austan Goolsbee, Inflation, Labor Market