Fed’s Bowman says dissent on large rate cut based on above-target inflation data

WASHINGTON (Reuters) – Federal Reserve Governor Michelle Bowman said on Friday she dissented over the U.S. central bank’s half-percentage-point interest rate cut this week, favoring a quarter-percentage-point reduction instead, because inflation remains above the 2% target and she worried the public would misinterpret the larger move as “a premature declaration of victory.”

The job market and the economy remain strong, Bowman said in a statement released Friday afternoon, while “core personal consumption expenditures prices are still rising faster than 2.5% from 12 months earlier.”

Core inflation strips out food and energy components that are volatile on a month-to-month basis and are not thought to reflect underlying price trends.

“We have not yet achieved our inflation goal,” Bowman said. “I believe that moving at a measured pace toward a more neutral policy stance will ensure further progress in bringing inflation down to our 2% target. This approach would also avoid unnecessarily stoking demand.”