Fed rate cut vote not unanimous

As he did on the previous three-quarters point cut, Dallas Federal Reserve President Richard W. Fisher dissented. He did so, alone, in January. This time he was joined by Philadelphia Fed chief Charles Plosser. Both said, in indications they are more worried about inflation than Federal Reserve Chairman Ben Bernanke, The Worst Fed Head Since Greenspan™.

“Containing inflation is the purpose of the ship I crew for,” Fisher said (earlier this month).

“And if a temporary economic slowdown is what we must endure while we achieve that purpose, then it is, in my opinion, a burden we must bear, however politically inconvenient.”

Beyond Fisher’s dissent, saying the Fed needs to worry more about inflation, the second three-quarter point cut this year has one other problem:

It smacks of desperation

“ think it is true that Federal Reserve actions coming closely one after the other in the last few weeks — while no doubt are helpful for the economy — they carry with them a risk that people will perceive them as involving some slight desperation,” said Marvin Goodfriend, economics professor at the Carnegie Mellon University.

Well, the market gave away most of yesterday’s gains. Apparently smoke and mirrors, or voodoo rate cuts, only go so far in assuaging insecurity, greed, or a combination thereof.