WASHINGTON (Reuters) - St. Louis Federal Reserve bank president James Bullard said he dissented at this week’s Federal Open Market Committee meeting because he felt weak inflation and uncertainties about the outlook for economic growth warranted an interest rate cut.
“Inflation measures have declined substantially since the end of last year and are presently running some 40 to 50 basis points below the FOMC’s 2% inflation target,” Bullard said in a statement released Friday morning.
With inflation expectations also weak, “I believe that lowering the target range for the federal funds rate at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks.”
The Fed held rates steady at a range of between 2.25% and 2.5% after its two-day policy meeting which concluded Wednesday.
However, the central bank indicated in new economic projections that it was poised to reduce rates by perhaps half a percentage point over the rest of the year.
Reporting by Howard Schneider; Editing by Kevin Liffey