Fed Minutes showed officials remained cautious and divided
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The latest release of the Fed’s meeting Minutes offered a wide-ranging look at how policymakers are weighing the path ahead. From rate-cut debates to concerns about inflation, market stability and the composition of the bank’s balance sheet, the discussion showed a Committee that remains cautious, divided at the margins, and sensitive to shifting economic risks. Key Quotes Most participants judged further rate reductions would likely be appropriate over time, but several indicated they did not necessarily view a reduction in december as appropriate. Policymakers were divided over support for that meeting’s rate cut and over whether a December cut would be appropriate. Several participants assessed a December rate cut could be appropriate if the economy evolved as they expected. Most participants noted further rate cuts could add to the risk of higher inflation becoming entrenched or could be misinterpreted as a lack of commitment to the 2% inflation objective. Many participants suggested that under their outlooks it would be appropriate to keep rates unchanged for the rest of the year. Many participants favoured October’s rate cut, though some among them said they could have supported no change. Several participants highlighted the possibility of a disorderly fall in stock prices, especially in the event of an abrupt reassessment of AI-related prospects. Almost all participants noted it was appropriate to conclude the balance sheet reduction programme on December 1. Most participants favoured a Fed portfolio matching the composition of treasuries outstanding. The Fed staff economic outlook for the October meeting saw modestly stronger real GDP growth through 2028 relative to the September forecast. Some participants favoured a larger-than-proportional share of T-Bills, citing the benefits of greater flexibility. Market reaction to the FOMC Minutes The Greenback keeps its march north unabated in the wake of the publication of the FOMC Minutes, with the…
Filed under: News - @ November 19, 2025 10:29 pm