Fed's George not ready to vote in favour of rate cuts

A top US central bank official made the case against further interest rate cuts so long as the American economy was growing at a pace near what rate-setters' forecast, pointing out that the costs associated with unwarranted policy easing.

In remarks to Bloomberg TV, Esther George, the head of the Federal Reserve bank of Kansas City, said she did not see a worsening outlook so she was not ready to vote for further stimulus.

The interview with George - one of two policymakers who voted against a rate cut at the 30-31 July Federal Open Market Committee meeting - had been recorded the day before, ahead of the Federal Reserve's 22-24 August central banking symposium at Jackson Hole, Wyoming.

Come 1439 BST on Thursday, as her remarks were being aired, Fed funds futures had fully priced-in three 25 basis point interest rate cuts by the time of the April 2020 FOMC and decent odds of a fourth reduction, according to the Chicago Mercantile Exchange's Fed Watch tool.

"Easing policy is not a free choice," George said.

"It, remember, pulls forward demand. It can make leverage more attractive. And I think, depending on where you think you are in the business cycle, it can create more risk."

"Markets see how the rest of the world is slowing. I think uncertainty never plays well in the markets.

"So, I understand why you see fear and uncertainty right now. That isn’t the metric, though, that I feel we have to focus on. We have a clear mandate and, I think, a long-term view that we have to stay focused on."