WASHINGTON - Most Federal Reserve policymakers supported the need for an interest rate cut in September, minutes of the central bank’s last policy meeting showed, but they remained divided on the path ahead for monetary policy.
Fed policymakers at the Sept. 17-18 meeting decided, in a 7-3 vote, to lower the benchmark overnight lending rate by a quarter percentage point to between 1.75% and 2%. In projections that accompanied the September statement, seven of the Fed’s 17 policymakers indicated they forecast one more rate cut this year. Five policymakers did not see any more cuts needed and the other five projected a rate rise by the end of 2019. Investors overwhelmingly expect another rate cut at the next meeting on Oct. 29-30.
Financial markets were little moved by the minutes, as investors focused on the ongoing trade saga. U.S. stocks and the dollar rose on a report China was open to a partial deal with the United States. U.S. Treasury prices were lower.Fed Chair Jerome Powell is in the camp that views rate cuts that have occurred as necessary insurance in order to keep the longest U.S.
The minutes showed Fed policymakers generally had become more concerned with trade risks and other headwinds to the economy, such as slowing global growth and the uncertainty over Brexit. Several policymakers noted that statistical models suggested the likelihood of a recession over the medium term had increased in recent months and a number warned that the labor market coming into 2019 may have been less strong than previously thought, pointing to Bureau of Labor Statistics preliminary revisions to payrolls data.
They’re being influenced by Trump - he’s using the bribe/blackmail doctrine against them just as he does against everyone else.