Fed Officials Had 'Strongly Differing Views' on December Rate Decision, October Meeting Minutes Show

03:52 PM EST, 11/19/2025 (MT Newswires) -- Federal Reserve officials offered "strongly differing views" regarding the central bank's interest rate decision in December, minutes of the October meeting showed Wednesday, underscoring a growing divide among policymakers.

At the most recent meeting, the Federal Open Market Committee delivered a second straight 25-basis-point rate cut amid continued concerns regarding the labor market. Two officials dissented from the majority, with recently appointed Fed Governor Stephen Miran preferring a 50-basis-point cut and Kansas City Fed President Jeffrey Schmid voting in favor of leaving rates unchanged.

In his post-meeting remarks last month, Fed Chair Jerome Powell indicated uncertainty around a potential rate cut in December.

"Participants expressed strongly differing views about what policy decision would most likely be appropriate at the committee's December meeting," the meeting minutes showed Wednesday. "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" participants indicated that they would support further policy easing next month if the economy evolved as expected, while "many" seemed to back a pause, the minutes showed.

The FOMC was also divided over last month's policy decision.

"Many participants were in favor of lowering the target range for the federal funds rate at this meeting, some supported such a decision but could have also supported maintaining the level of the target range, and several were against lowering the target range," the minutes showed, referring to the October meeting.

Participants favoring a rate cut last month cited increased downside risks to employment, whole those who preferred a no-change stance expressed concerns about high inflation, according to the document.

The strong disagreement among FOMC members regarding an appropriate policy in December was a "real surprise," Vikram Rai, senior economist at TD Economics, said in a report published Wednesday.

"The recent upticks in inflation and the signs that tariffs are going to start passing through to inflation are eroding some members' confidence in the balance of risks, and may be pushing out rate cuts further," Rai said.

The official US jobs report for September is scheduled to be released Thursday, according to the Bureau of Labor Statistics. That report was delayed due to the record-long federal government shutdown, which ended last week. The BLS said Wednesday it will not publish an October employment report.

The probability that the FOMC will cut rates by another quarter percentage point next month fell to 34% Wednesday from 50% Tuesday, according to the CME FedWatch tool. The odds of monetary policy remaining unchanged surged to 66% from 50%.

"The release of the missing jobs data tomorrow will be critical for the FOMC," Rai said. "The potential for the committee to favor holding rates constant in December rests in part on the assessment of the labor market as softening but not sharply deteriorating."

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