Overview
- The Fed lowered its policy rate by 25 basis points to 3.75%–4.00% in a 10–2 vote, with Governor Stephen Miran seeking a larger half-point cut and Kansas City Fed President Jeffrey Schmid opposing any cut.
- Schmid said recent reports point to roughly 2.8% inflation on the Fed’s preferred gauge and described price pressures as widening across goods and services, including rising healthcare and insurance costs.
- He argued the economy still shows momentum, monetary policy is only modestly restrictive, and the labor market is largely in balance, so a small cut would not meaningfully address labor stresses.
- Dallas Fed President Lorie Logan said this week’s reduction was not warranted and signaled she would resist a December cut without clear evidence of faster disinflation or a sharper labor-market cooling; she is not a voter this year.
- With official data releases halted by the government shutdown, policymakers are leaning on private indicators and business contacts, and Chair Jerome Powell has said another reduction in December is not a foregone conclusion.