Federal Reserve officials voted to cut interest rates at the September policy meeting, but according to new minutes, some were uncertain how aggressive they should be in kicking off the easing cycle.
The Fed lowered the benchmark federal funds rate by a super-sized 50 basis points, to a range of 4.75–5.0 percent. This was the first rate cut in more than four years. Fed Governor Michelle Bowman was the lone dissenting vote, advocating a quarter-point cut instead.
Last month’s meeting summary revealed several participants championed a smaller quarter-point rate cut because it might signal a stable path toward policy normalization.
“Several participants noted that a 25 basis-point reduction would be in line with a gradual path of policy normalization that would allow policymakers time to assess the degree of policy restrictiveness as the economy evolved,” the meeting summary stated….