Fed meeting MOM notes

The term "participants" in the FOMC includes more than just the 12 voting members.

Some members favored a rate cut at the July meeting, but it didn’t happen.

The minutes focused more on the debate around the 25 basis point cut, less on the reasons for supporting a larger cut.

Powell described the rate cut as a "recalibration" to better align policy with inflation and labor market indicators.

The recalibration wasn’t meant to signal a negative economic outlook or rapid policy easing.

A 50 basis point cut was supported by some as it would sustain economic strength and promote inflation progress.

Historically, the Fed prefers quarter-point cuts, with half-point moves seen only during crises like Covid or the 2008 financial crash.

Markets expect the Fed funds rate to end 2025 in the 3.25%-3.5% range, with a low chance of a cut at the November meeting.

Treasury yields surged by about 40 basis points after the Fed meeting.