Most Federal Reserve officials expect to lower interest rates again this year amid growing concerns about a cooling labor market and easing inflation pressures, according to minutes from the central bank’s September meeting released Wednesday.
The minutes showed that “most judged that it likely would be appropriate to ease policy further over the remainder of this year,” as downside risks to employment have increased while inflation risks have diminished.
At the September 16–17 meeting, the Fed cut its key rate by a quarter-point to a range of 4% to 4.25%, the first reduction of 2025.
Policymakers said job growth had slowed and unemployment had edged higher, while inflation appeared to have stabilized somewhat above the Fed’s 2% target.
The document underscored divisions within the 19-member committee. While most supported the cut, a few argued for holding rates steady to avoid reigniting inflation, and one member, Governor Stephen Miran, dissented in favor of a larger half-point cut, citing “further softening in the labor market.”
Markets are pricing in at least two more rate cuts before the year-end, according to surveys cited in the minutes.
But with a federal government shutdown halting key economic data, including the September jobs and inflation reports, the Fed may face added uncertainty heading into its next policy meeting later this month.