No commitment on Fed rate cuts: minutes

Washington. A “substantial majority” of Federal Reserve (Fed) officials in September supported ushering in an era of looser monetary policy with a half-percentage point cut in rates, but there appeared to be even broader agreement that the The initial measure did not commit it to any particular rate of reductions, according to the minutes of the session.

Supporters of the half-point cut “noted that such an adjustment to the stance of monetary policy would begin to better align it with recent inflation and labor market indicators,” according to minutes of the September 17-18 session, published on Wednesday.

At that meeting, the Fed reduced the official reference interest rate to a range of between 4.75 and 5 percent from 5.25 and 5.50 percent that it had maintained since July 2023.

Other participants noted that there were “plausible arguments” for cutting rates at the July meeting and that data released since then had only reinforced them.

“Some,” however, supported a quarter-percentage-point cut, while “a few others indicated they might have supported such a decision.”

The minutes provided more detail on the breadth of opinion within the Fed, as policymakers approved a rate cut of a size normally reserved for times when the central bank is concerned the economy is slowing. rapidly and needs the support of looser financial conditions.

Fed officials said at the meeting that rate cuts could continue as long as inflation continues to decline, although the pace and end point remain open to debate.

Traders of futures contracts that track the Fed’s short-term rate target on Wednesday maintained bets that the central bank will cut the policy rate by a quarter point next month.

The interest rate on the most popular mortgage loan in the United States rose to 6.36 percent last week, its biggest rise in more than a year, after better-than-expected economic data that caused financial markets to reduce bets on further interest cuts. Fed rates.