They were not, though, in a panic or worried about an imminent recession. Instead, they were thinking that the old interest rate would not be appropriate going forward.

Inflation might actually fall too far, the Fed governor says, opening the door wider for more half-point interest-rate cuts.

Here’s how inflation and the cost of borrowing have changed since the Fed started raising interest rates in March 2022. After peaking at 9.1% in June 2022, inflation has eased, falling to a three-year low of 2.5% in August, just above the Fed’s 2% target rate.