MW 'Inflation remains too high.' Two Fed dissenters who rejected latest interest-rate cut explain why.
By Jeffry Bartash
The Fed could have waited for delayed economic reports on inflation and employment, Goolsbee says
Top officials at the Federal Reserve are not in agreement about how to help the economy.
Two top Federal Reserve officials who voted against cutting U.S. interest rates this week said inflation remains too high and the central bank should have waited for more evidence that price increases are slowing.
One of the two dissenters, Chicago Federal Reserve Bank President Austan Goolsbee, had voted in favor of rate cuts at the bank's previous two meetings.
"While I voted to lower rates at the September and October meetings, I believe we should have waited to get more data, especially about inflation, before lowering rates further," Goolsbee said Friday.
The other dissenter, Kanas City Fed chief Jeffrey Schmid, said "inflation remains too high." Schmid also voted against a rate reduction in October.
Goolsbee and Schmid expressed less worry about the U.S. job market than did the majority of their colleagues, who voted in favor of a rate cut.
"The economy shows continued momentum, and the labor market - though cooling - remains largely in balance," Schmid contended.
The two dissenters had contrasting views on what the Fed should do next year, however.
Goolsbee said he was "optimistic that interest rates can come down a significant amount over the next year." He said he still expects inflation to wane as the effects of tariffs fade.
Yet he also said he was worried about the persistence of inflation before the 43-day government shutdown in October and November deprived the Fed of critical information on inflation and employment trends.
Most of the delayed reports will be published in the next few weeks.
Schmid said he doesn't think interest rates should be reduced much further. "I view the current stance of monetary policy as being only modestly, if at all, restrictive," he said.
In 2026, both Goolsbee and Schmid will rotate out of the Fed panel that sets a key U.S. interest rate used to influence borrowing costs across the economy.
One of the four new voters on the Fed's rate-setting panel in 2026, Cleveland Fed President Beth Hammack, also appears to believe interest rates should not go any lower. A few other members have also expressed skepticism about the Fed's recent string of rate cuts.
The Fed next meets in January. Nine of the 12 voting members of the Federal Open Market Committee supported a quarter-point rate cut this week, and one wanted a half-point reduction.
In early Friday trading, the Dow Jones Industrial Average rose DJIA, but the S&P 500 SPX fell slightly. The yield on the 10-year Treasury BX:TMUBMUSD10Y rose to 4.2%, reaching a three-month high.
-Jeffry Bartash
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(END) Dow Jones Newswires
December 12, 2025 09:50 ET (14:50 GMT)
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