WASHINGTON — The Federal Reserve released the minutes from its contentious meeting earlier this month on Tuesday, which resulted in a narrow vote to reduce interest rates. This decision seemed more contentious than the final vote suggested.
During the December 9-10 meeting, officials presented a range of opinions, as detailed in the summary released a day early due to the New Year’s holiday.
The Federal Open Market Committee eventually approved a cut of a quarter-percentage point with a 9-3 vote, the most dissensions recorded since 2019. The decision came as officials debated the need to bolster the labor market against inflationary concerns, lowering the key funds rate to a range of 3.5%-3.75%.
The minutes noted, "Most participants judged that further downward adjustments to the target range for the federal funds rate would likely be appropriate if inflation declined over time as expected."
However, there were concerns about the future levels of aggression the FOMC should adopt. "With respect to the extent and timing of additional adjustments to the target range for the federal funds rate, some participants suggested that it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting," the minutes revealed.
Officials remained confident about moderate economic growth, although they acknowledged potential risks to employment and inflation. This dichotomy showed that the vote had been closely contested despite the six-vote margin in favor of the cut.
The document also noted, "A few of those who supported lowering the policy rate at this meeting indicated that the decision was finely balanced or that they could have supported keeping the target range unchanged."
In response to the release, stocks saw a slight decline, and traders increased their expectations of another rate cut in April.
The vote coincided with a quarterly update of the committee’s Summary of Economic Projections, including the