The U.S. Federal Reserve Board may have switched to a neutral bias in yesterday’s rate announcement, but BCA Research believes it has more work to do.

“Yesterday’s rate cut still leaves the funds rate too high given the downside risks to economic growth,” the firm says in a research note, adding that there may have been an intense debate to produce that rate cut. The decision was not unanimous, with one FOMC member voting to leave rates alone.

“Overall GDP growth is holding up despite the housing meltdown, policymakers are sensitive to criticism that they are bailing out imprudent borrowers and lenders, and some FOMC members still worry about inflation. Nevertheless, there are major economic uncertainties and risks in the outlook, and the level of rates still seems too high,” BCA says.

It notes that the funds rate should be between 3% and 4%. “The Fed has shifted to a neutral bias, but the easing cycle is only part way through,” it concludes.