According to ChainCatcher, "Federal Reserve mouthpiece" Nick Timiraos said that at last month's meeting, Fed officials had differences on the extent of the rate cut, with the vast majority supporting a larger 50 basis point cut that was ultimately approved, but others supporting a smaller 25 basis point cut.
The published minutes shed light on the discussion about why officials chose to start with a bolder 50 basis point cut for the first time since 2020. The decision to cut rates to a range of 4.75% to 5% was supported by 11 of the 12 members of the Fed’s rate-setting committee. One policymaker dissented in favor of a smaller cut.
Supporters of a bigger rate cut “generally believed that such a recalibration of the stance of monetary policy would begin to bring it better in line with recent inflation and labor market indicators,” the minutes said. Some of those officials argued that a quarter-point rate cut was “reasonable” at the last meeting in late July and that recent data had only reinforced the case for the cut.