Fed policymakers agree on need for rate cuts, but their reasons vary
interest rate cut in the cards at their Sept. 17-18 meeting.
By the end of last month, when Federal Reserve Chair Jerome Powell said it was time to start lowering borrowing costs, nearly all of his colleagues thought so too.
In large part, that was because a wide range of data moved in one direction. That pushed Fed policymakers to reassess the risks to their outlook, including whether their chief concern should be persistent inflation, labor market weakness, a deterioration in business or household financial conditions, a potential policy mistake, or some combination of those factors.
«It's not one thing that causes everyone to move. It's different people focus on different data, different indicators, different risks, and then they all end up in the same place,» said Kristin Forbes, an economics professor at MIT's Sloan School of Management and a former member of the Bank of England's policy-setting committee.
Speaking on the sidelines of the Kansas City Fed's annual economic symposium in Jackson Hole, Wyoming, last month, where Powell declared the time had come for U.S. rate cuts, Forbes said: «And that's where a good (Fed) Chair can bring people together to get the outcome they want, but often by drawing on different motivations to get different people there.»
At least a couple of Fed policymakers appear to still be on the fence, their support for policy easing contingent on further signs of a slowdown in inflation or weakness in the labor market.
But for the vast majority of Fed policymakers, a first
