MNI: Most Officials See Further Rate Cuts - Fed Minutes

Most Federal Reserve officials supported lowering interest rates in December and cutting rates further if inflation cools as expected, according to the minutes of the meeting released Tuesday. 

"Most participants judged that further downward adjustments to the target range for the federal funds rate would likely be appropriate if inflation declined over time as expected," the minutes said. 

The FOMC voted 9-3 for a third straight quarter-point cut in December amid rising downside risks to employment, but Chair Jerome Powell signaled caution over further easing. The unemployment rate edged up in September and private-sector data suggested continued softening. 

New York Fed President John Williams said in an interview after the meeting that there was no urgency to "act further on monetary policy right now" because the cuts have positioned the Fed well to react to evolving economic conditions.  

"With respect to the extent and timing of additional adjustments to the target range for the federal funds rate, some participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting," the minutes said.

Two voters dissented in favor of no change to rates, and the minutes signaled they had more support among the full committee. "Some" preferred to keep the target range unchanged, while "a few" of those who supported the rate cut indicated they could have also supported keeping the target range unchanged, the minutes said.

"Those who preferred to keep the target range for the federal funds rate unchanged at this meeting expressed concern that progress toward the Committee’s 2% inflation objective had stalled in 2025 or indicated that they needed to have more confidence that inflation was being brought down sustainably to the Committee’s objective," the minutes said. 

A few officials said the data did not suggest "any significant further weakening in the labor market."