The Fed released its September 16-17 Federal Open Market Committee (FOMC) meeting minutes on Wednesday, showing a committee dealing with a mix of a softening labor market and inflation above the target rate of 2%.
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Following the release of the minutes, the odds of a 25 bps rate cut at the October 28-29 FOMC meeting dropped to 92.5% compared to 95.1% a day ago, while the odds of the Fed maintaining rates rose to 7.5% from 4.9%.
Fed Minutes Show Caution on Jobs, Confidence on Policy
Most Fed officials expect at least two 25 bps rate cuts by the end of 2025, with about half of them calling for three cuts. In addition, the decision to cut rates by 25 bps last month was nearly unanimous, with Fed Governor Stephen Miran dissenting in favor of a 50 bps reduction.
Furthermore, a majority of the committee agreed that the risk of unemployment rose since the July FOMC meeting, while some noted that the Fed’s “2 percent inflation objective had stalled this year.” Still, the Fed remains confident that it is in a good position to respond to any economic developments.
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