FOMC Watch - "December is far from a foregone conclusion"
Rogier Quaedvlieg
The FOMC lowered its policy rate by 25 bps to the 3.75-4.00% range. There were two dissents, with Miran favouring a half-point cut, and Schmid favoring no cut. The Schmid dissent came as a surprise, and likely reflects wider disagreement and uncertainty going forward. Powell explicitly confirmed this, highlighting substantial difference of opinion and noting that December is 'far from' a foregone conclusion. Apart from that, the monetary policy statement maintains the description of the labor market, noting that recent indicators are consistent with earlier developments. Powell's rationalization for today's cut was therefore identical to last time; risks to the two sides of the mandate have become more balanced and the policy rate was moved closer to neutral.
