WASHINGTON — Two Federal Reserve officials expressed opposition Wednesday to another interest rate cut at the central bank’s next meeting in December, further muddying the outlook for the Fed’s next steps.
The remarks by Susan Collins, president of the Federal Reserve Bank of Boston, and Raphael Bostic, president of the Atlanta Fed, suggest that the central bank’s rate-setting committee could be tilting against what had been an expected third straight cut next month.
The officials cited several reasons for keeping rates unchanged, after a reduction in September and in October. They argued that inflation is stubbornly elevated and has been above the Fed’s 2% target for nearly five years, while the economy is resilient and doesn’t appear to need more rate cuts. The job market is stumbling, with hiring nearly at a standstill, but layoffs still seem muted, they said.
Another factor has been the government shutdown, which has cut off the economic data the Fed relies on to discern the economy’s path. On Wednesday White House spokeswoman Karoline Leavitt said that the jobs and inflation reports for October would likely never be released.
“Formulating an economic outlook is challenging — and the limited data compounds the difficulty,” Collins said in a speech in Boston.
“It will likely be appropriate to keep policy rates at the current level for some time … in this highly uncertain environment,” she added.
That is a shift from her previous speech in October, when she expressed support for at least one more rate cut.
Earlier Wednesday, Bostic said he remains concerned inflation is too high, and added that, “I … favor keeping the funds rate st