FED: FOMC Minutes Preview: Participants Lean Hold, Voters Lean Cut (2/3)

We now see 10 (of 19) members who would go into the December meeting supportive of a hold to varying degrees. In terms of the 12 voters, though, we think it’s currently 7-5 in terms of favoring a cut, with a core bloc of 4 members including Chair Powell set to sway the Committee in one direction or another. Coming out of the September meeting, there was a fine division between the number of participants who saw 3 or more cuts (10 of 19) and those who saw 2 or fewer (9) in their Dot Plot submissions. That overall division has persisted, but it sounds to us as though the relative hawks now slightly outnumber the doves.

• There are now at least two current voters – Boston’s Collins and KC's Schmid - who could outright oppose a follow-up easing in December. It would not surprise us if their fellow regional Fed voters, Chicago’s Goolsbee and St Louis’s Musalem, were to resist another cut.
• While Collins had previously sounded as though she could increasingly resist a December cut, her inter-meeting comment that “it will likely be appropriate to keep policy rates at the current level for some time” brought one of the most hawkish market reactions. Kashkari has had the most surprising shift overall, going from a 3-cuts-in-2025 proponent just after the September meeting, to opposing cuts in Oct and Dec. 

We would categorize the current state of play as: 

• 6 Definite December holders: We have heard explicitly from Cleveland’s Hammack, Dallas’s Logan, Schmid (voter), Collins (voter), Kashkari, and Atlanta’s Bostic that they would prefer to hold rates in December and/or indefinitely.
• 4 Likely leaning hold: Gov Barr (voter), Musalem (voter), and Richmond’s Barkin have sounded consistently patient on the cutting front to varying degrees. To our ear, Goolsbee (voter) sounds like he is in favor of a “dovish hold” (signalling further cuts in 2026 while taking a break in December) having expressed increasing concerns over inflation and set a higher bar to a December cut than the one he supported in October though we do acknowledge he’s very much on the fence and could end up going with an eventual majority that votes for a cut.
• 3 Definite December cutters, all voters: Gov Waller (voter) has reiterated the case for further easing, with Gov Miran (voter) continuing to argue for 50bp cuts; we have no reason to think Gov Bowman (voter) has changed her mind on the need for more easing.
• 2 Likely December cutters: SF’s Daly and Philadelphia’s Paulson (no commentary since October FOMC) have previously expressed support for Sep/Oct/Dec cuts and we have no reason to think they’ve changed their minds.
• 4 permanent members in a Bloc lean to a cut: We haven’t heard at all from Chair Powell since the October meeting, but we think that he, Cook, Jefferson, and Williams will vote as a bloc. Right now we would guess all of these permanent FOMC voters would support a cut.