FOMC Minutes: Several indicated they didn't necessarily view a Dec cut appropriate

2025-11-19 19:02:00

• Most participants judged that further downward adjustments would likely be appropriate over time to move toward a neutral stance.
• Several participants assessed a Dec cut would be appropriate if economy evolved as they expected

• Downside risks to employment have risen in recent months, while job gains have slowed

• Inflation has moved up since earlier in the year and remains “somewhat elevated,” with upside risks still present

• Two dissents highlight a fractured committee: Stephen Miran wanted a larger 50 bps cut; Jeffrey Schmid wanted no cut at all

• Almost all participants agreed to end balance sheet runoff (QT) on December 1 as reserves approach “ample” levels

• Money market conditions tightened materially during the intermeeting period, with repo rates moving notably higher

• Future reinvestments from agency securities will be directed into Treasury bills to shift the portfolio composition

• Participants noted a “divergence” in consumer spending: High-income households are supported by equity gains, while lower-income groups are pulling back

• Tariffs are expected to put upward pressure on inflation in 2025 and 2026 according to staff projections

• Staff economic outlook sees GDP growth remaining above potential until 2028, though uncertainty remains elevated.

This article was written by Adam Button at investinglive.com.