Fed minutes highlight resistance to December cut

The October FOMC minutes revealed a deep policy split, and “strongly differing views”, showing officials wrestling with how quickly to bring rates toward neutral. While the majority continues to expect additional easing “over time,” many expressed reluctance to cut again in December, marking a more hawkish tone than markets had priced in. Traders reacted swiftly, pushing the probability of a December rate cut down to roughly 33%, compared with near 50% earlier in the week.

Participants were divided across a wide spectrum of views. Several argued that economic conditions would justify another quarter-point reduction at the next meeting “if the economy evolved about as they expected over the coming intermeeting period.”

However, “many participants” judged that keeping rates “unchanged for the rest of the year” would be more “appropriate” under their baseline outlooks. Others supported further easing but emphasized that December may not necessarily be the right moment.

The Committee delivered its second straight cut in October, moving rates to 3.75–4.00%, but Chair Jerome Powell emphasized at the press conference that another move in December was “not a foregone conclusion.” The internal debate documented in the minutes supports that caution and signals stronger resistance to front-loading additional cuts.

Full FOMC minutes here.