2 Federal Reserve officials highlight deep divisions

WASHINGTON — Two Federal Reserve officials who dissented from this week’s quarter-point rate cut are highlighting the deep divisions at the central bank.

Eric Rosengren, head of the Fed’s Boston regional bank and one of two officials who opposed the rate cut, says that the additional stimulus was not needed. He says it runs the risk of inflating the price of risky assets and encouraging households and business to take on too much debt.

James Bullard, head of the St. Louis Fed branch, dissented in favour of a bigger half-point cut. He argues that a larger reduction would have provided needed insurance against a sharper slowdown.

In a CNBC interview, Vice Chairman Richard Clarida, who supported the latest quarter-point rate cut, says healthy debate is a strength of the Fed system.

Martin Crutsinger, The Associated Press