Early Friday, Jim Bullard released a short blog post explaining why he argued for a 50bp rate cut at the September Fed meeting.
He was one of three dissents.
The other two dissenters were, of course, Esther George and Eric Rosengren, who both thought the Fed should stay on hold. They dissented in the July rate cut as well.
Shortly after Bullard explained his rationale for wanting more easing, Rosengren explained, in very simple terms, why he believes that policy should not be more accommodative. Find his brief comments, along with the accompanying charts, are below.
By Eric Rosengren
The stance of monetary policy is accommodative.
Additional monetary stimulus is not needed for an economy where labor markets are already tight, and risks further inflating the prices of risky assets and encouraging households and firms to take on too much leverage.
While risks clearly exist related to trade and geopolitical concerns, lowering rates to address uncertainty is not costless.
The following four charts reflect the key data on which I base this view, with each chart’s title summarizing a key point. Also, I will describe my views in more detail in a speech taking place today at 11:20 a.m., entitled Assessing Economic Conditions and Risks to Financial Stability.