FOMC Minutes Show Disagreements on Path of Monetary Policy, Chance of December Rate Cut

02:40 PM EST, 11/19/2025 (MT Newswires) -- The discussion around the need for rate reductions was mixed, with many Federal Open Market Committee participants suggesting that while more easing of policy is needed, the upcoming meeting in December may not be the right time, minutes of the Oct. 28-29 FOMC meeting released Wednesday showed.

The FOMC voted at the meeting to lower the target for its federal funds rate to 3.75% to 4.00%, with two dissents. Fed Governor Stephen Miran, as expected, wanted the FOMC to lower the target range by 50-basis points, while Kansas City Fed President Jeffrey Schmid wanted no rate reduction.

While many supported the rate cut, some said that could have supported maintaining the target rate and several were against the rate reduction.

"Those who favored or could have supported a lowering of the target range for the federal funds rate toward a more neutral setting generally observed that such a decision was appropriate because downside risks to employment had increased in recent months and upside risks to inflation had diminished since earlier this year or were little changed," the minutes showed.

Conversely, those who wanted to maintain the target rate were concerned that inflation remained above the FOMC's 2% target and that more confidence was needed that inflation would return to the downward path to that goal before interest rates could be reduced.

The level of restriction was a point of debate for the participants, with some still seeing policy as restrictive even after the 25-basis point reduction, while others said that it was not clearly restrictive, opening up differing opinions on the policy path ahead.

"In discussing the near-term course of monetary policy, participants expressed strongly differing views about what policy decision would most likely be appropriate at the Committee's December meeting," the minutes showed. "Most participants judged that further downward adjustments to the target range for the federal funds rate would likely be appropriate as the Committee moved to a more neutral policy stance over time, although several of these participants indicated that they did not necessarily view another 25-basis point reduction as likely to be appropriate at the December meeting."

"Several" suggested that policy could be reduced at the December meeting if the economy evolves as expected, while "many" participants said that it would likely be appropriate to maintain the current policy stance for the rest of the year.

In the days following the meeting, FOMC participants publicly expressed differing views on whether a rate cut was needed at this meeting and whether a further reduction is guaranteed for the next meeting in December, echoing the discussion at the meeting.

Further complicating those decisions is the government shutdown, which ended on Nov. 12 but will still have consequences until the backlog of data is released. This is most evident in the rescheduling of November employment data for Dec. 16 from the original date of Dec. 5, placing it now after the Dec. 9-10 FOMC meeting.

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