Federal Reserve Governor Michelle Bowman cast the only vote against the rate cut, preferring a smaller quarter-point reduction.
In her statement, Bowman acknowledged progress on lowering inflation but expressed concern that a larger cut might suggest “a premature declaration of victory on our price stability mandate.” This marked the first dissenting vote from a governor since 2005.
Waller discussed various potential paths for future rates, which would depend on upcoming economic data. His comments influenced futures market pricing, with traders estimating a 50-50 chance of another half-point reduction at the November 6-7 meeting, according to CME Group’s FedWatch.
As a former advocate of large rate hikes when inflation surged, Waller reaffirmed his commitment to the Fed’s 2 percent inflation target. “If the data starts coming in soft and continues to come in soft, I would be much more willing to be aggressive on rate cuts to get inflation closer to our target,” he said.
The Federal Reserve is set to receive more inflation data next week, with the Commerce Department’s August report on the personal consumption expenditures price index.