Divergent Views on Future Rate Policy
Expectations for a rate cut at the Federal Reserve's December meeting are leading to a clear division within the institution. The differing perspectives highlight the ongoing debate about the appropriate monetary policy stance in the current economic climate.
Hawkish Stance from Lorie Logan
Fed member Lorie Logan maintained her hawkish stance, stating in December that she would not support another interest rate cut. Logan had also opposed the cut at the October meeting, highlighting the risks of high inflation. In her statement, Logan emphasized that inflation is still above target and the upward trend continues.
“Looking at the December meeting, it’s hard for me to support another rate cut unless we see strong evidence that inflation is falling faster than I expected, or a more significant cooling in the labor market than a gradual slowdown.”
Dovish Outlook from Stephen Miran
Meanwhile, fellow Fed member Stephen Miran adopted a more dovish stance, arguing that recent data provided a strong case for a rate cut. In his assessment on November 15th, he said that all economic data released since the September meeting pointed to a more lenient policy stance. Miran noted that inflation was better than expected, while the labor market weakened significantly.
“All the data we've received supports a dovish stance. Under these circumstances, we need to be more dovish, not the other way around.”