FOMC Dissenter Calls Out Fed's Inconsistent Rate Policy Amid Economic Uncertainty

FOMC member Michelle Bowman has raised concerns about the Federal Reserve’s inconsistent approach to monetary policy, particularly regarding interest rate decisions. This comes amid growing scrutiny over why the Fed chose to cut rates in late 2024 but has since opted to hold rates steady in 2025, despite similar inflation and unemployment levels. Bowman, the Fed’s Vice Chair for Supervision, emphasized the importance of maintaining a consistent policy framework amid shifting economic conditions [1].

Bowman’s criticism highlights a key issue in recent FOMC deliberations: the perceived inconsistency in the Fed’s timing of rate cuts. In December 2024, the Fed reduced the base interest rate despite an inflation rate of 2.9%, which was higher than the rate seen in the first half of 2025. The unemployment rate at that time was also relatively close to current levels. Yet, despite mounting pressure from the White House and economic analysts, the Fed has so far refrained from further easing monetary policy in 2025 [1].

Bowman was one of two dissenters in the Fed’s most recent meeting, which decided to keep the policy rate in the range of 4.25% to 4.5%. She had previously indicated her preference for a rate reduction. In a speech at the Kansas Bankers Association 2025 CEO and Senior Management Summit, she acknowledged differing viewpoints among FOMC members but reiterated her commitment to ensuring that monetary policy supports the Fed’s dual mandate of maximum employment and price stability [1].

Her comments add to a broader debate about the Fed’s independence and the potential influence of political considerations. Prominent critics, including Wilbur Ross, former Commerce Secretary under President Donald Trump, have questioned the Fed’s reluctance to cut rates more aggressively. Ross argued that Powell had shown greater flexibility in previous years, and suggested that Fed officials, as human beings, may not be entirely free from political or economic biases [1].

Bowman also expressed concerns about the reliability of key economic data, particularly in the labor market. She noted that declining survey response rates and shifting dynamics in immigration and business creation have made it increasingly difficult to interpret monthly labor market reports. This skepticism is reinforced by recent downward revisions to employment data from the Bureau of Labor Statistics (BLS), which showed that job growth had been significantly overstated in previous months. Payroll figures for May and June were slashed by 258,000 combined, raising further doubts about the accuracy of official labor market readings [1].

Despite these challenges, Bowman reiterated her forecast for three rate cuts in 2025, a view that has remained consistent since December 2024. However, she emphasized that the Fed’s monetary policy is not on a fixed path and that each decision will be made based on the latest economic developments and their implications for the Fed’s dual mandate [1].

The Fed’s decisions have drawn heightened scrutiny from policymakers and economists who argue that the timing and consistency of rate cuts are critical in maintaining confidence in the central bank’s credibility. As the debate continues, the Fed faces increasing pressure to justify its decisions on a transparent and fact-based basis, particularly in light of recent data revisions and shifting economic conditions [1].

Source: [1] One FOMC dissenter might have just called out the Fed for its shifting base interest rate policy (https://fortune.com/2025/08/11/michelle-bowman-fomc-dissent-base-interest-rate/)