Fed Minutes Show Officials Agree Rate Cuts Needed, But Inflation Concerns Persist

Federal Reserve officials agree that while the policy rate needs to be cut further, they remain concerned about inflation, according to minutes from September’s Federal Open Market Committee (FOMC) meeting.

The minutes also showed that labor market weakness remained among the top concerns of the central bank, which noted that although the unemployment rate remained low, the pace of employment increases had slowed, and labor market conditions had softened.

The Fed also remained cautious about inflation, stating that it had remained somewhat elevated.

“In considering the outlook for monetary policy, almost all participants noted that, with the reduction in the target range for the federal funds rate at this meeting, the Committee was well positioned to respond in a timely way to potential economic developments,” the Fed minutes stated, adding that there were a “range of views” about the future path of the central bank’s monetary policy.

Of the Fed’s 19 officials, there was a slim majority of 10-9 in favor of two 25 bps cuts in the FOMC’s October and December meetings. “Participants stressed the importance of taking a balanced approach in promoting the committee’s employment and inflation goals,” the minutes said.

Data from CME Group’s FedWatch tool points to a 92.5% probability of the Fed cutting the interest rate by 25 basis points in October.

Meanwhile, U.S. equities rose in Wednesday’s afternoon trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.55%, the Invesco QQQ Trust ETF (QQQ) rose 0.95%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.14%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was down 0.02% at the time of writing.

Also See: AST SpaceMobile, Fair Isaac, Rocket Lab, Confluent, Joby Aviation: Stocks Making The Biggest Moves Today

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on