"Fed Whisperer": Fed meeting minutes show divergence in September rate cut

"The Fed Whisperer" Nick Timiraos stated that at last month's meeting, Federal Reserve officials had diverging views on the magnitude of the rate cut, with a vast majority supporting the ultimately approved larger 50 basis point cut, while others favored a smaller 25 basis point cut. The just-released meeting minutes shed light on the discussion around why officials opted for the bolder 50 basis point rate cut, marking the first rate cut since 2020. The decision to lower rates to a range of 4.75% to 5% had the support of 11 out of the 12 members of the Federal Reserve's rate-setting committee. One policymaker dissented from this decision, advocating for a smaller cut. The meeting minutes noted that those in favor of a larger rate cut "generally believed that this recalibration of the monetary policy stance would begin to better align it with recent inflation and labor market indicators." Some officials viewed the 25 basis point cut at the end of July's meeting as "appropriate," with recent data merely confirming the rationale for the rate cut