The Fed opted against cutting rates, but a rare dissent from two governors says the central bank risks being too late amid a cooling labor market.
The Fed’s dissenters are laying out their case for cutting interest rates.
This week, Jerome Powell and the central bank opted to keep rates unchanged, but there was a rare double dissent from two Fed officials. It was the first time two governors had dissented in 30 years.
Powell, for his part, has continued to insist that the Fed is still « a ways away from seeing where things settle down », regarding President Donald Trump’s tariffs and the impact on inflation.
Yet, two members of the Federal Open Market Committee disagreed, and on Friday, they each released statements unpacking their views.
Governor Christopher Waller and Vice Chair for Supervision Michelle Bowman have both previously advocated for cutting interest rates, and reiterated their views at this week’s meeting.
Both expressed concern regarding the US labor market, and newly released data may back up their claims. The nonfarm payroll report on Friday showed that the US economy added 73,000 jobs in July, fewer than expected. May and June also saw figures revised lower by a combined 258,000, pointing to a weakening labor market.
