Fed’s Bullard says he dissented at Wednesday’s Fed meeting because manufacturing ‘appears in recession’

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St. Louis Federal Reserve President James Bullard on Friday explained his dissent from the Federal Open Market Committee’s decision on Wednesday to reduce rates by a quarter of a percentage point to a range of 1.7%-2%. The Fed president said he sees the U.S. economy slowing “in the near horizon” and said that the manufacturing sector “already appears in recession.” For that reason, Bullard said deeper cuts were more appropriate to stem the effects of slowing growth abroad and the harmful impact of a U.S.-China tariff dispute that has helped to amplify some of the weakness in the global economy. “In my view, lowering the target range by 50 basis points to 1.50%-1.75% would have been a more appropriate action,” Bullard said in a statement released on the St. Louis Fed’s website on Friday. Fed Chairman on Wednesday at a news conference to discuss the FOMC decision said that the central bank would act “act as needed” to keep the U.S. expansion on track. Three of the 10 members of the rate-setting FOMC dissented on Wednesday’s decision. Including Bullard, Boston Fed President Eric Rosengren and Kansas City Fed President Esther George voted against the move because they wanted the Fed to hold rates steady. U.S. stock-index futures were drifting higher after Bullard’s statement was released, with those for the Dow Jones Industrial Average and the S&P 500 index on track to test fresh record highs.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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