Fed minutes reveal officials unlikely to cut rates again
Policymakers at the Federal Reserve largely agreed during their two-day meeting in October that another interest rate cut is not warranted, so long as the economy remains on its current path of growth.
Minutes from the Oct. 29-30 Federal Open Market Committee published Wednesday revealed that the current rate range of 1.5 percent to 1.75 percent will likely "remain appropriate."
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Officials offered little guidance on what it would take for them to move rates again, after they voted to lower rates three times this year.
“Most participants judged that the stance of policy, after a 25 basis point reduction at this meeting, would be well calibrated to support the outlook of moderate growth, a strong labor market and inflation near the committee’s symmetric 2 percent objective,” the Fed said.
Federal Reserve Board Chair Jerome Powell testifies on the economic outlook, on Capitol Hill in Washington, Wednesday, Nov. 13, 2019. (AP Photo/Jose Luis Magana)
Chairman Jerome Powell reiterated a similar sentiment during congressional testimony last week, saying he believed the "current stance of monetary policy" is "likely to remain appropriate" unless economic conditions dramatically change.
“Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely,” he said. “This favorable baseline partly reflects the policy adjustments that we have made to provide support for the economy.”
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Still, officials maintained that monetary policy is not on a preset course, noting that members will take into account changes in economic data and the general outlook.
In July, the central bank first cut rates, ending an era of monetary policy tightening by policymakers, who had voted nine times - as recently as December - since 2015 to hike rates. Powell has repeatedly positioned the cuts as a "mid-cycle adjustment" intended to insulate the economy against the U.S.-China trade dispute and a global growth slowdown.
The Fed has one more policy-setting meeting before the end of the year, slated to take place on Dec.10-11. Traders largely expect the U.S. central bank to keep rates unchanged until at least mid-2020.