“Substantial majority” supported 50bp cut”Almost all” participants agreed upside risks to inflation had diminishedMost said downside risks to employment had increasedA few participants noted that a 25 basis point move could signal a more predictable path of policy normalizationCommittee gained “greater confidence” inflation moving sustainably toward 2% goalRisks to employment and inflation goals now seen as “roughly in balance”Economic activity expanding at “solid pace”, job gains slowed but unemployment remains lowInflation made “further progress” but still “somewhat elevated”Most participants see balanced risks to inflation outlookSome members would have preferred 25bp cut, citing still-elevated inflation and solid growthBowman dissented, preferring 25bp cut due to core inflation well above targetMembers anticipate moving toward more neutral policy stance over time if data evolves as expectedCommittee will “carefully assess” data for additional rate adjustments
Some participants noted there had been a plausible case for a 25 basis point cut at the previous meeting, and data since then provided further evidence of sustainable progress on inflation. However, some participants indicated they would have preferred a 25 basis point reduction, citing that inflation was still somewhat elevated while economic growth remained solid and unemployment remained low.
I don’t see much in these minutes that would shift the debate on what the FOMC will do next but the odds of a hold in November are at 20%, up from 15% earlier today.
This article was written by Adam Button at www.forexlive.com.
