Skip to main content

FOMC Rate Cut Should Have Been Larger

ST. LOUIS–One member of the Federal Open Markets Committee says he believes the Fed erred last week and should have cut rates further.

James Bullard, president of the Federal Reserve Bank of St. Louis, said deeper rate cuts are necessary to head off growing economic risks. At its most recent meeting the FOMC cut rates by 25 basis points.

“Lowering the target range for the federal funds rate by 50 basis points at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks,” Bullard told the Wall Street Journal. “It is prudent risk management, in my view, to cut the policy rate aggressively now and then later increase it should the downside risks not materialize.”

Bullard was among three members of the FOMC who voted against the 25-basis point reduction, but he cast his vote for a different reason, as the other two FOMC members dissented because they didn’t believe any rate cut was necessary. The three dissenting votes were the first to be cast since an FOMC meeting in September of 2016.

Growing Risks

Bullard told the Journal the risks of an economic slowdown are growing, and noted the Fed’s target-rate range, which now stands at between 1.75% and 2%, is higher than other major nations. Bullard also said a bigger rate cut now would help speed a return to 2% inflation.

Bullard further told the Journal that while his vote went against the consensus, he remains confident that his colleagues “will continue to monitor economic developments and respond accordingly as economic circumstances dictate.”



Comments

Popular posts from this blog

NCOFCU Newsletter

The Bucket Coach is a financial advice book designed by Fire Services Credit Union, Tronto, Canada. and written exclusively for Fire Fighters It's a practical guide for household financial management, including investments, credit and mortgages, and retirement. Developed with contributions from Fire Fighters," NCOFCU Newsletter : " Kevin Connolly Chief Executive Officer    Fire Services Credit Union Phone: 416-440-1294 ext 301  Toll Free: 1-866-833-3285 E-mail:  kevin@firecreditunion.ca 1997 Avenue Rd Toronto, ON M5M 4A3 

Vought: ‘We’re Closing Down The CFPB’ — White House Budget Chief Says Agency Will Shut Down Within Months

  10/16/2025 09:03 am         WASHINGTON—White House Budget Director Russell Vought said Wednesday he plans to shut down the CFPB, PYMNTS reported. Russell Vought Speaking on  The Charlie Kirk Show , Vought said only a handful of employees remain at the CFPB’s Washington headquarters “while we close down the agency,” adding that he expects the process to be completed “within the next two or three months.” Vought’s remarks come amid a series of legal challenges targeting the Administration’s attempts to scale back or dismantle the CFPB. The Administration is currently facing lawsuits from a CFPB labor union and consumer advocacy groups, which argue that Trump lacks the authority to dismiss most of the Bureau’s staff or eliminate the agency altogether. On Wednesday, Vought repeated long-standing Republican criticisms that the CFPB has exceeded its authority and imposed unfair burdens on smaller financial institutions, PYMNTS noted. “All they want to do is wea...

New from AutoLink

New from AutoLink

Understanding the Fed’s Balance Sheet

Chair Jerome H. Powell Monetary policy is more effective when the public understands what the Federal Reserve does and why. With that in mind, I hope to enhance understanding of one of the more arcane and technical aspects of monetary policy: the Federal Reserve's balance sheet. A colleague recently compared this topic to a trip to the dentist, but that comparison may be unfair—to dentists. 1 Today, I will discuss the essential role our balance sheet played during the pandemic, along with some lessons learned. I will then review our ample reserves implementation framework and the progress we have made toward normalizing the size of our balance sheet. I will conclude with some brief remarks on the economic outlook. Background on the Fed's Balance Sheet One of the primary purposes of a central bank is to provide the monetary foundation for the financial system and the broader economy. This foundation is made of central bank liabilities. On the Fed's balance sheet, the liabili...

AI Meets Retail: Walmart Lets Shoppers Buy Directly Through ChatGPT Using Sparky Instant Checkout

  10/15/2025 07:10 pm         BENTONVILLE, Ark.— Walmart is teaming up with OpenAI to introduce Sparky AI-driven shopping experiences that let customers and Sam’s Club members complete purchases directly through ChatGPT using its new Instant Checkout feature, PYMNTS reported. The collaboration broadens Walmart’s use of artificial intelligence across its retail ecosystem and underscores a wider industry move toward conversational, predictive commerce. Through the integration, shoppers can plan meals, restock household essentials, or discover new products simply by chatting with ChatGPT—while Walmart manages the entire transaction process seamlessly in the background, PYMNTS explained. “For many years now, eCommerce shopping experiences have consisted of a search bar and a long list of item responses,” Doug McMillon, president and CEO of Walmart Inc., stated in the PYMNTS report. “That is about to change. There is a native AI experience coming that is multi-media...