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2 Federal Reserve officials highlight deep divisions
WASHINGTON — Two Federal Reserve officials who dissented from this week’s quarter-point rate cut on Friday highlighted the current deep divisions at the central bank.
Eric Rosengren, head of the Fed’s Boston regional bank and one of two officials who opposed the rate cut, said Friday that the additional stimulus was not needed. He said it ran the risk of inflating the price of risky assets and encouraging households and business to take on too much debt.
James Bullard, head of the St. Louis Fed branch, dissented in favour of a bigger half-point cut. He argued that a larger reduction would have provided needed insurance against a sharper slowdown.
Both officials issued explanations of their dissents after the blackout period for public comment surrounding Fed meetings ended.