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Two Members of FOMC Indicate December Rate Cut Not a Sure Thing

 WASHINGTON–Two members of the Fed’s Open Market Committee have indicated they are in no hurry to further cut rates, despite market expectations.

“I’m not decided going into the December meeting” and “my threshold for cutting is a little bit higher than it was at the last two meetings,” Federal Reserve Bank of Chicago President Austan Goolsbee said in a Yahoo Finance interview. “I am nervous about the inflation side of the ledger, where you’ve seen inflation above the target for four and a half years, and it’s trending the wrong way.”

Goolsbee was interviewed after last week’s Federal Open Market Committee meeting that saw policymakers cut their interest rate target by a quarter percentage point, to between 3.75% and 4%, as officials sought to offset rising risks to the job market while still keeping interest rates in a position where they’ll help lower inflation pressures, noted Yahoo Finance.

As the report also noted, Fed Chair Jerome Powell cautioned last week that “a further reduction in the policy rate at the December meeting is not a foregone conclusion.”

Meanwhile, Federal Reserve Governor Lisa Cook, in her first policy speech since President Donald Trump tried to remove her from office, said she supported the recent interest rate reduction and indicated she would be open to more.

‘Gradual Steps’

Cook told the Brookings Institution that she generally views the economy as solid with risks to both the Fed’s goals of low unemployment and stable inflation.

“I viewed that decision as appropriate, because I believe that the downside risks to employment are greater than the upside risks to inflation. I view the latest reduction in the fed funds rate as another gradual step toward normalization,” she was quoted by CNBC as saying.

She said there will be a lot of data to look at before making any decision on rates at the Fed’s December meeting.

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