01:26 PM EDT, 09/20/2024 (MT Newswires) -- Federal Reserve Governor Michelle Bowman said in a statement on Friday that she would have preferred a smaller 25-basis point rate reduction at this week's Federal Open Market Committee meeting, where she contributed the first dissent by a Fed governor in almost 20 years.

"Given the progress we have seen since the middle of 2023 on both lowering inflation and cooling the labor market, I agree that at this meeting it was appropriate to recalibrate the level of the federal funds rate and begin the process of moving toward a more neutral policy stance," Bowman wrote. "In my view, however, a smaller first move in this process would have been a preferable action."

Bowman said that the larger 50-basis point reduction that the other 11 voters approved at the meeting could falsely be seen as an acknowledgment that inflation has been defeated.

"Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5%, I see the risk that the Committee's larger policy action could be interpreted as a premature declaration of victory on our price stability mandate," Bowman said. "We have not yet achieved our inflation goal. I believe that moving at a measured pace toward a more neutral policy stance will ensure further progress in bringing inflation down to our 2% target. This approach would also avoid unnecessarily stoking demand."

Bowman said that she remains committed to bringing inflation down to the 2% goal.

"Despite my dissent at our recent meeting, I respect and appreciate that my colleagues preferred to begin the reduction in the federal funds rate with a larger initial reduction in the target range for the policy rate," Bowman said. "I remain committed to working together with my colleagues to ensure that monetary policy is appropriately positioned to achieve our goals of maximum employment and returning inflation to our 2% target."