When the Federal Reserve decided last night to make an emergency 0.75 percent cut in its target federal funds rate, eight members of the Federal Open Market Committee approved the move. The lone dissenter was William Poole, president of the Federal Reserve Bank of St. Louis. According to the FOMC’s policy statement, Poole didn’t necessary object to the size of the cut, but he “did not believe that current conditions justified policy action before the regularly scheduled meeting next week.”

Poole has said before that intermeeting policy actions should be rare. The last time the Fed made such an emergency cut was in 2001. Poole addressed the issue of when and whether to surprise the market in a 2005 speech:

In general, the Fed can use intermeeting adjustments to respond to special circumstances, such as the rate cut on September 17, 2001, in response to 9/11, or to provide information to the market about a major change in policy thinking or direction, such as the rate cut on April 18, 2001. My own preference is to confine intermeeting adjustments to circumstances in which delaying action to the next meeting would have significant costs. In general, if the market believes that changed circumstances will lead to a changed decision at the next regularly scheduled meeting, then little is gained by acting between meetings. By reserving almost all actions to regularly scheduled meetings, intermeeting actions have special force, which can be valuable in meeting financial crises.

My interpretation is that, despite Monday’s huge selloff in European stock markets, Poole doesn’t think we’re at the crisis stage. Apparently his FOMC colleagues think differently.