The Fed Meeting Minutes Cautiously Suggest Further Rate Cuts This Year

BlockBeats News, October 9th: The divergence among Federal Reserve officials on the future direction of interest rates is growing, but most believe that further rate cuts are necessary this year. The minutes of the Fed's September meeting released on Wednesday showed that the committee is struggling to reconcile conflicting economic signals and is having difficulty reaching a consensus on whether stubborn inflation or a soft labor market is the most pressing issue.

The minutes showed that Fed officials unanimously agreed that given the recent weak employment data, a rate cut was necessary, but there was disagreement among officials about the future path. However, the minutes showed that "most believe that further policy easing in the remaining time this year may be appropriate." Nevertheless, some policymakers "pointed out that from several indicators, financial conditions suggest that monetary policy is not particularly restrictive, and they believe a cautious approach is necessary."

Based on forecasts from September, 10 Fed officials indicated that they expect two more rate cuts this year, while 9 believe there should be one cut or fewer. (FXStreet)