The US Federal Reserve wrongly cut interest rates this week, needlessly offering stimulus amid low unemployment and encouraging risky debts, a voting member of the central bank said Friday.
"Additional monetary stimulus is not needed for an economy where labour markets are already tight, and risks further inflating the prices of risky assets and encouraging households and firms to take on too much leverage," Boston Federal Reserve Bank President Eric Rosengren said in a statement.
Along with two others, Rosengren on Wednesday voted against a decision to cut interest rates by 25 basis points.
But Rosengren's statement laid bare the intensifying disagreements among Fed policymakers.
Fellow voting Fed member James Bullard, president of the St. Louis Federal Reserve Bank, said Friday that Wednesday's rate cut was not enough, arguing that instead the Fed should have cut by an even deeper 50 basis points.
The central bank has been pulled in divergent directions by mixed economic data while recession fears have risen during President Donald Trump's entrenched trade conflicts.
The United States currently enjoys low unemployment, strong consumer spending, rising wages, steady job creation and moderate GDP growth with stock market prices near record highs.
On the other hand, hiring has slowed, business investment and exports are weak, agriculture has borne the brunt of retaliation in the US-China trade war and the manufacturing sector is officially in recession as the global economy slows.
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