The Federal Reserve's meeting minutes reveal: Support for a 50 basis point rate cut, focusing on the future policy path

The Federal Reserve announced a historic interest rate cut of 50 basis points at its monetary policy committee on September 18th. According to the minutes, most attendees supported the decision to cut rates, and in the final vote, only one person voted against.

It can be seen from the minutes that:

Some believed that there was a reason to cut rates by 25 basis points at the previous meeting in July;

Others believed that even without a rate cut, the current monetary policy is in line with the path of gradual policy normalization.

It is worth mentioning that Federal Reserve officials who might have voted against a 25 basis point rate cut in September stated that they prefer to focus on determining the overall path of policy rather than getting bogged down in the initial rate cut magnitude.

Federal Reserve meeting minutes reveal: Support for a 50 basis point rate cut, focusing on the future policy path

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There are differing views within the Federal Reserve on the degree of tightening

Although some members emphasized the need for "external communication," they did not rule out the possibility of further easing if necessary. Even after the rate cut in September, the pace of balance sheet reduction may continue for some time.

Due to the labor market indicators appearing weaker since the last monetary policy committee meeting, many Federal Reserve staff have downgraded their economic growth forecasts for the second half of this year.Almost all committee members believe that the employment outlook faces downside risks, and the risks of achieving the 2% inflation and employment growth targets have been roughly balanced.

Jun Cheng Technology WT3 news information indicates that this reflects policymakers' increased confidence in the sustained reduction of inflation to the 2% target, and some believe that nominal wage growth has slowed down, so wage increases are unlikely to become a widespread source of inflationary pressure in the near future.

Fed Meeting Minutes Reveal: Support for a 50 Basis Point Rate Cut, Focus on Future Policy Path

The vast majority of officials support a more substantial rate cut.

Jun Cheng Technology WT3 news information indicates that most participants believe that, given the robust economic growth, low unemployment rate, and inflation still above the 2% target, the Federal Reserve should take more substantial rate-cut measures. In addition, an unspecified number of officials expressed their support for a smaller rate cut.

The three major U.S. stock indexes rose for two consecutive days, closing near their daily highs.

The Dow Jones Industrial Average rose 37.95 points to 28,614.30, a gain of 0.3%; the S&P 500 index rose 0.9% to 3,257.37, a gain of 0.1%; the Nasdaq Composite Index rose 0.6% to 10,617.88, a gain of 0.2%.

The healthcare, technology, and industrial sectors led the gains. The financial sector saw some gains, and the telecommunications services, industrial, and technology sectors also performed strongly. The utilities, communication, and real estate sectors lagged behind.

Fed Meeting Minutes Show: Most Participants Support a Substantial 50 Basis Point Rate CutThe meeting minutes indicated that all participants unanimously agreed that, in light of the strong trends in recent economic and labor market indicators, as well as inflation remaining well above the 2% target level, in order to alleviate these pressures and maintain an accommodative monetary policy stance, the committee decided to lower the federal funds rate to between 1.0% and 1.25%.

Jun Cheng Technology WT3 news information, there was no clear consensus on the degree of policy restriction, but it is more important to determine the overall path of policy normalization rather than the specific extent of the initial easing at this meeting.