Minutes from the Federal Open Market Committee’s (FOMC) September 16-17 meeting indicate that US Federal Reserve officials were generally open to lowering interest rates further before the end of the year. The minutes revealed that “most judged that it likely would be appropriate to ease policy further over the remainder of this year”. However, the record of the meeting also showed concerns surrounding rising inflation, with “a majority of participants emphasised upside risks to their outlooks for inflation”.
During the September gathering, officials voted 11-1 to cut interest rates by a quarter percentage point, bringing the range to 4 per cent to 4.25 per cent. This marked the first rate cut of the year. Stephen Miran, a newly appointed official, dissented, advocating for a more substantial half-point reduction. Projections released after the meeting suggested expectations of two additional quarter-point cuts by year’s end, based on the median estimate.
Despite the general sentiment, divisions within the committee were evident. While most participants anticipated further easing, six out of the nineteen projected either one or no cuts in 2025. The minutes also highlighted that “a few participants stated there was merit in keeping the federal funds rate unchanged at this meeting or that they could have supported such a decision”. These officials expressed reluctance in supporting the rate cut.
Policymakers acknowledged increased risks to the labour market. However, they generally felt a sharp deterioration in employment conditions was unlikely. According to the minutes, “Participants generally assessed that recent readings of these indicators did not show a sharp deterioration in labour market conditions”.
