By CHRISTOPHER RUGABER, Associated Press
WASHINGTON (AP) — A majority of Federal Reserve policymakers expressed support in late October for further interest rate cuts, though not all committed to making the reduction at their next meeting in December, according to minutes released Wednesday.
At the same time, many officials said “it would likely be appropriate” to keep rates “unchanged for the rest of the year,” a sign of strong divisions among policymakers about the central bank’s next steps.
Rate cuts by the Fed, over time, typically lower borrowing costs for mortgages, car loans, and credit cards.
Fed officials are deeply split over the biggest threat to the economy: weak hiring or stubbornly-elevated inflation. If a sluggish job market is the biggest threat, then the Fed would typically cut rates more. But it combats inflation by keeping rates elevated, or even raising them.
Chair Jerome Powell had telegraphed the deep divisions among the Fed’s 19-member interest-rate setting committee at a news conference following the Oct. 28-29 meeting. The minutes were released after the customary three-week delay.
“Participants expressed strongly differing views” about whether the Fed should cut at its December 9-10 meeting, the minutes said.
The central bank decided to cut its key rate to about 3.9% at the late October meeting, down from 4.1% and the second cut this year. In September, the Fed projected it would reduce rates three times this year, in September, October, and December.