The Federal Open Market Committee decided Sept. 18 to lower its target range for the federal funds rate by 25 basis points, but Federal Reserve Bank of St. Louis CEO James Bullard said more should have been done.

What Happened

The Fed lowered its target range from 2% to 1.75%, but Bullard wrote in a blog a more "appropriate action" would be lowering the target range to 1.5%.

The economist, who has held his post since 2008, argued U.S. economic growth is likely to slow in the near-term amid trade policy uncertainty.

The domestic manufacturing industry "already appears to be in recession," he said. 

Personal consumption expenditures inflation measures remain 40 to 60 basis points below the FOMC's 2% target, Bullard said.

Inflation expectations continue to model longer-term rates "substantially below" the target despite recent rate cuts, he said. 

Why It's Important

The Fed should have taken bigger steps to lower rates as an insurance policy against continued declines in inflation and a slowing economy, Bullard said.

The bigger cut would also be seen as "prudent risk management" and help push inflation closer to the target rate, in his view. 

What's Next

Bullard remains "confident" that Fed officials will continue monitoring economic development and "respond accordingly" to any changes, Bullard said.