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FED: Sept Minutes Preview: Instant Answers Look For How Many Eyed 25bp Cut (1/2)

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The minutes to the September FOMC meeting (released Wednesday at 1400ET) could shed further light on the decision to semi-surprise markets with a 50bp vs a 25bp cut to begin the easing cycle. Our full preview is here (PDF).

  • While the vast majority of participants have since commented that they supported the half-point cut, the meeting decision brought the first dissent from a Fed governor (Bowman) since 2005, and it will be interesting to get a gauge of how many non-voting members also opposed the outsized rate reduction. It seems from comments since that meeting that the vast majority – including hawks – supported the 50bp cut.
  • It's to be expected that the discussion over the future rate path will revolve around a data-dependent/meeting-by-meeting approach, but the characterization of the decision to cut 50bp will be of note in this context if there was a sense of falling behind the curve of labor market deterioration, and/or regret over not cutting 25bp in July.
  •  Was there more support on the Committee to get to neutral quickly due to policy being far too restrictive, or for the front-loaded 50bp being a pure "recalibration", with the bar to sizeable future easing set a little higher?
  • MNI has one question for the Instant Answers release – “Did several or more participants say they could have supported a 25 bp cut in Sept?”
     
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The minutes to the September FOMC meeting (released Wednesday at 1400ET) could shed further light on the decision to semi-surprise markets with a 50bp vs a 25bp cut to begin the easing cycle. Our full preview is here (PDF).

  • While the vast majority of participants have since commented that they supported the half-point cut, the meeting decision brought the first dissent from a Fed governor (Bowman) since 2005, and it will be interesting to get a gauge of how many non-voting members also opposed the outsized rate reduction. It seems from comments since that meeting that the vast majority – including hawks – supported the 50bp cut.
  • It's to be expected that the discussion over the future rate path will revolve around a data-dependent/meeting-by-meeting approach, but the characterization of the decision to cut 50bp will be of note in this context if there was a sense of falling behind the curve of labor market deterioration, and/or regret over not cutting 25bp in July.
  •  Was there more support on the Committee to get to neutral quickly due to policy being far too restrictive, or for the front-loaded 50bp being a pure "recalibration", with the bar to sizeable future easing set a little higher?
  • MNI has one question for the Instant Answers release – “Did several or more participants say they could have supported a 25 bp cut in Sept?”