The key takeaway from the US Federal Reserve’s (Fed) minutes of its 17/18 Sep 2024 Federal Open Market Committee (FOMC) meeting was that, while all participants agreed that it was appropriate to ease the stance of monetary policy in September, but not everyone was on board with the decision of a 50-bps rate cut, OCBC FX analysts Frances Cheung and Christopher Wong note.

FOMC minutes key takeaways

“The main reason for the start of easing was ‘greater confidence that inflation was moving sustainably towards 2 percent’, while the overall assessment on the labour market was ‘solid’ although many participants saw the evaluation of the labour market as challenging.”

“‘Some participants observed that they would have preferred a 25 basis point’ and ‘a few others indicated that they could have supported such a decision’ – this reflected more support for a 25bp cut as compared to the vote with one dissident only.”

“The 50bp cut was partly a catch-up as ‘there had been a plausible case for a 25 basis point rate cut at the previous [July] meeting’. Our base-case remains for a 25bp cut each at the November and December FOMC meeting.”