Michelle Bowman said such a big initial rate cut could complicate the Fed's mission of getting inflation back to its 2% target.

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.

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.