On interest rates – The Economist:

‘ It also represents a bet by the Fed that inflation will soon be yesterday’s problem and that action is needed to support the labour market. For the first time since 2005, one of the Fed’s governors in Washington, dc, dissented from the decision. Michelle Bowman preferred to cut rates by a quarter-point.’

(…)

‘The Fed’s cut is a form of insurance. It takes months for rate reductions to filter through the economy. Given this lag, and given the expectation that the economy will continue to slow, it makes sense for the Fed to make a bigger move now in order to get ahead of the coming weakness. The central bank was late in raising rates in 2022. This time, it hopes that starting with a bigger cut will steer the economy towards a soft landing, avoiding the recession which many analysts once thought inevitable. “We don’t think we’re behind,” said Mr Powell. “We think this is timely. But I think you can take this as sign of our commitment not to get behind.”’

(…)

‘Mr Powell has long said that he tunes out the political din. He may well need a hefty pair of noise-cancelling headphones in the coming weeks.’

Read the article here.

Since I’m doing an internship at the Central Bank in the Netherlands I can say with more confidence than before that the task of the central bank is to not get behind, indeed.

And headphones yes, always helpful, but schmoozing with other more or less powerful people is what the chair does as well, at least that’s my impression.