Fed Minutes tilt dovish as policymakers weigh further cuts
The latest minutes from the Federal Reserve’s September meeting suggest policymakers are leaning toward further rate cuts this year. While most officials backed the quarter-point reduction, the discussion reflected growing concern about labour market risks and a more balanced inflation outlook. The tone overall was cautious but pointed to a continued easing bias.
Key Quotes:
Most participants judged it would likely be appropriate to ease policy further over the remainder of 2025.
Some participants noted financial conditions suggested policy may not be particularly restrictive
Those participants judged a cautious approach to future policy was warranted.
Almost all participants supported a quarter-percentage-point cut to the fed funds rate at the september meeting.
Most participants judged downside risks to employment to have increased, while upside risks to inflation had either diminished or not increased.
Participants generally noted their judgements about appropriate policy action reflected a shift in the balance of risks.
A few participants saw merit in keeping the fed funds rate unchanged or said they could have supported such a decision.
One participant preferred a half-percentage-point rate cut.
A majority of participants emphasised upside risk to their outlooks for inflation.
A few participants noted the standing repo facility would help keep the fed funds rate in the target range and ensure money market pressures would not disrupt ongoing quantitative tightening.
Fed staff revised up gdp growth projections for 2025 through 2028.
Market reaction to the FOMC Minutes
The Greenback remains firm for yet another day, lifting the US Dollar Index (DXY) to fresh two-month highs north of the 99.00 hurdle amid mixed US yields across the curve.
Source: Fxstreet.com
