Fed sees three dissents over an 'easing bias.' What's that?

By Dan Burns

April 29 (Reuters) - More Federal Reserve officials dissented against Wednesday's U.S. central bank policy decision and statement than at any of their interest-rate-setting meetings in the past 34 years.

One was familiar: Governor Stephen Miran voted against the decision to hold rates steady, his sixth straight dissent since joining the Fed last September, and likely his last with his board seat set to be taken by Kevin Warsh, chosen by President Donald Trump as the next Fed chair.

Three, though, were new and unexpected: Regional reserve bank presidents Beth Hammack of Cleveland, Lorie Logan of Dallas and Neel Kashkari of Minneapolis, who were on board with the rate decision but not with leaving "an easing bias" in the accompanying policy statement.

An easing bias is a signal that on balance the Fed's 19 monetary policymakers - 12 of whom get a vote at any meeting - are leaning more toward a rate cut as their next rate change than a rate hike.

Fed officials, however, did not say anything that explicit in their policy statement.

What they said was: "In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks."

The Federal Open Market Committee - the Fed's rate-setting panel - has included that exact sentence in each of its previous three statements, and used it starting in December in conjunction with the last of three straight rate cuts that had been foreshadowed by similar references to "additional adjustments" to the target rate. Because the "adjustments" that had been underway to that point were rate cuts, the continuing reference to "additional adjustments" implied an eventual resumption of rate changes in the same direction - lower.

Moreover, the Fed has used subtle shifts in phrasing recently to indicate it was backing off rate changes.

Starting in September 2024, the Fed cut rates at three straight meetings, and in its forward-guidance terminology during that period, it began that sentence with this phrase: "In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks."?

However, when it paused after the December 2024 cut, it amended the phrase slightly to read "In considering the extent and timing of additional adjustments." That signaled that rate changes were on hold but when officials were ready to resume rate changes, the next move was likely a cut.?

And it was. After five meetings on hold, rate cuts resumed in September 2025.

Hammack, Logan and Kashkari have all been vocal about their concerns that inflation is running too hot to be sending such a signal, even before the war in Iran sent energy prices soaring. Minutes of recent Fed meetings have shown a growing number of Fed officials would support statement language changes to indicate the Fed's next move could be in either direction - up or down.

Indeed, inflation is moving away from the Fed's 2% target, and Jerome Powell in his final press conference as Fed chief on Wednesday projected that the overall personal consumption expenditures price index the Fed uses to set its target was likely 3.5% in March and the underlying core rate excluding food and energy prices was 3.2%. The Fed has not overseen an inflation rate meeting its target in more than five years.

Powell acknowledged the three dissenters were indicative of a "center that is moving toward a more neutral place."

(Reporting By Dan Burns; editing by David Gaffen)