Most Fed Officials Supported Further Rate Cuts in 2025, September Meeting Minutes Show

04:05 PM EDT, 10/08/2025 (MT Newswires) -- Most of Federal Reserve officials indicated last month that it would be appropriate to further lower interest rates later this year amid growing concerns around the labor market, minutes from the central bank's September meeting showed Wednesday.

At the meeting, the Federal Open Market Committee lowered its benchmark lending rate by 25 basis points to a range of 4% to 4.25%. Policymakers at the time noted increased downside risks to employment and signaled further policy easing later in 2025. Recently appointed Fed Governor Stephen Miran preferred a 50-basis-point reduction at the meeting, and was the sole dissenter.

"Participants expressed a range of views about the degree to which the current stance of monetary policy was restrictive and about the likely future path of policy," the meeting minutes showed Wednesday. "Most judged that it likely would be appropriate to ease policy further over the remainder of this year."

Almost all participants indicated that with the September rate cut, the FOMC was well positioned to respond to potential economic developments, though some called for "a cautious approach," citing financial conditions that suggest monetary policy may not be particularly restrictive, according to the document.

A few policymakers saw merit in holding interest rates steady last month amid renewed inflation concerns, though most supported a rate cut.

"Participants generally noted that their judgments about this meeting's appropriate policy action reflected a shift in the balance of risks," the minutes showed. "In particular, most participants observed that it was appropriate to move the target range for the federal funds rate toward a more neutral setting because they judged that downside risks to employment had increased over the intermeeting period and that upside risks to inflation had either diminished or not increased."

A few meeting members said labor market conditions had been softening for longer than previously reported, the minutes showed. Most policymakers expected the effects of tariff hikes on inflation to be realized by the end of 2026.

Recently, Fed Chair Jerome Powell said the FOMC was facing a "challenging situation" with respect to its dual mandate of price stability and maximum employment, noting that near-term risks to inflation were tilted to the upside and those to employment leaning downside.

On Tuesday, Carlyle Group (CG) data showed the US economy likely added 17,000 jobs in September, indicating a weaker-than-expected print as a federal government shutdown delayed the official nonfarm payrolls report last week. The Senate once again couldn't pass Republicans' stopgap funding bill on Wednesday, extending the shutdown into its eighth day.

"There was no hint in the meeting minutes about what (policymakers) might do in the case of missing or delayed data in the event of a government shutdown," TD Economics said in a report. "Nonetheless, we expect that the committee is likely to maintain its assessment of the balance of risks revealed in the minutes, and reduce its target rate (by) another (quarter) percentage point at its next meeting."

Markets widely expect the FOMC to deliver a 25-basis-point rate cut later this month, according to the CME FedWatch tool.

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