Fed FOMC Member Explains Opposition to Rate Cut: Inflation Risk Still Too High, Should Prudently Wait for More Information

December 12 – A Federal Reserve voting member on Wednesday detailed his dissent at this month’s interest rate meeting. Chicago Fed President Evans said his dissent this week was to wait for more economic data to confirm whether tariff impacts on inflation are only temporary. Almost all businesses and consumers he has recently engaged with in his district cite prices as a top concern, so he favors a cautious approach to gather additional information. Evans still optimistically expects interest rates could fall “quite substantially” next year. Kansas City Fed President George noted inflation remains too high, economic growth momentum stays strong, and while the labor market has cooled somewhat, it remains broadly balanced. She believes current monetary policy—even if restrictive—is only slightly so. Philadelphia Fed President Purser (who will gain voting rights in 2026) said the labor market is “under pressure but not collapsing,” and monetary policy is somewhat restrictive, though recent easing measures will cushion the labor market. The Fed will assess how developments like tariffs and artificial intelligence (AI) will impact the economy. If AI drives a productivity boom fueling high growth, the necessary policy response will differ from a scenario with high inflation risks.