New York Fed Bank President: it doesn't make sense to start rate cuts with a 25 basis point margin

Dudley, who was president of the Federal Reserve Bank of New York from 2009 to 2018, said that if the risks between rising inflation and a weak labor market are really balanced, as Fed officials have said they are, then the Fed should want interest rates to be closer to neutral levels. Given that all Fed officials believe that interest rates are below 4%, it does not make sense to start cutting rates by 25 basis points. Logically, the Fed should move faster. Plus last week's jobs report wasn't particularly reassuring, as the unemployment rate has climbed 0.5 percentage points since the beginning of the year.