Fed Governor Lael Brainard said the economic outlook is “solid” as supported by consumer spending. However, business spending has been “lackluster” with soft sentiment. And, lower inflation expectations could be entrenched if Fed allows inflation to run below target for too long. And, that would make it even hard for Fed to cushion the next downturn.
She expressed her support for a rate cut as “taking into account the downside risks at a time when inflation is on the soft side would argue for softening the expected path of monetary policy according to basic principles of risk management.”
Though, she added, “of course, my judgment about the actual path of policy will continue to be influenced by the evolution of the data and the risks.”
