Fed minutes show division on rate cut decision

Minutes from the Federal Reserve’s September meeting reveal that officials disagreed on how much to lower interest rates. While the majority supported a larger half-point cut, a few preferred a smaller quarter-point reduction.

Ultimately, the Fed lowered its benchmark rate by 0.5% to a range of 4.75% to 5%, marking the first rate reduction since 2020.

Some officials believed the larger cut better aligned with inflation and labor market trends.

Despite the debate, 11 of the 12 committee members backed the half-point cut, and officials agreed it shouldn’t be seen as a sign of rapid future rate reduction.

September’s job reports showed economic resilience, with 254,000 jobs added and unemployment dropping to 4.1%. Fed Chair Jerome Powell has emphasized that future rate decisions will depend on the economy’s performance.