US: FOMC meeting minutes
Date: Thursday, 9 October at 3am SGT
At its last meeting in September, the Fed lowered the Fed Funds rate by 25 bp to a range of 4.00% – 4.25%, in line with expectations. It was the Fed’s first rate cut in nine months. Newly appointed board member Stephen Miran dissented, advocating for a 50 bp cut, contrary to expectations that Governors Waller and Bowman might support a larger reduction.
Fed Chair Jerome Powell’s prepared remarks were more dovish than previous statements, highlighting risks to employment and signalling further cuts. However, he struck a hawkish tone during the question and answer (Q&A), describing the rate cut as ‘risk management’ and noting rising growth projections in the Summary of Economic Projections (SEP).
Powell also remarked, ‘Let’s remember, though, the unemployment rate is 4.3 percent. The economy is growing at one and a half percent. So, it’s not a bad economy or anything like that. We’ve seen much more challenging economic times, but from a policy standpoint, what we’re trying to accomplish is challenging. There are, as I mentioned earlier, no risk-free paths now. It’s not incredibly obvious what to do, so we have to keep our eye on inflation.’
The FOMC minutes are expected to reflect a cautious tone, with most members supporting the 25 bp cut as a balanced approach to managing inflation and growth risks. The minutes are likely to emphasise the committee’s data-dependent stance, discussing the pace of future rate cuts and the evolving economic outlook. Investors will focus on any dissent, particularly Miran’s push for a larger cut, and the committee’s inclination toward aggressive easing or a gradual approach amid inflation concerns.
The US interest rate market is fully priced for a 25 bp Fed cut in October with an ~88% chance of another 25 bp cut in December. Looking ahead, there is a cumulative 115 bp of rate cuts priced through the end of 2026.