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Fed Minutes Reveal Unusual Split Over December Rate Cut

The record highlights policymaker disagreement rooted in unreliable post-shutdown data.

Overview

  • Officials cut the federal funds rate by a quarter point to 3.50%-3.75% in a 9-3 vote, marking a third reduction this year.
  • Two regional presidents opposed any cut, while Governor Stephen Miran argued alone for a larger half-point move.
  • Minutes note several supporters viewed the decision as finely balanced, and Chair Jerome Powell described a wait-to-see stance.
  • Data disruptions from the federal shutdown complicated the outlook, with November CPI at 2.7% and unemployment at 4.6% based on atypical collection methods.
  • The committee also approved resuming Treasury bill purchases to maintain ample bank reserves and ease short-term funding pressures.