FOMC minutes: Most Fed policymakers believed 25 bps cut was needed

  • The Federal Reserve's meeting minutes showed most policymakers saw 25 bps cut warranted.
  • Policymakers were generally more concerned about risks associated with trade tensions.
  • The US Dollar Index largely ignored the meeting minutes.

According to the minutes from the Federal Open Market Committee's (FOMC) September 17-18 monetary policy meeting, most policymakers believed that a 25 basis points rate cut was needed citing economic outlook, risk management and inflation objectives.

The US Dollar Index largely ignored the statement and was last flat on the day at 99.12. Below are some other key takeaways as reported by Reuters.

"Several participants said statistical models on the likelihood of a recession in medium-term had increased notably in recent months."

"Policymakers generally more concerned about risks associated with trade tensions, geopolitics and global economy."

"Although readings on labor markets and overall economy strong, clearer picture had emerged on weakness in investment, factories and exports."

"A couple of policymakers preferred a 50 basis point cut and stressed that forward guidance might also be needed."

"Several policymakers favored keeping rates steady, saying baseline economic projection had changed very little and that uncertainties would not derail the expansion."

"A couple of policymakers said a rate cut might be too much insurance and could leave policy with less scope for future shocks."

"Several policymakers suggested giving more clarity on when the Fed will end the recalibration of rate policy in response to trade uncertainties."

"A few policymakers said markets see more future accommodation than they see as appropriate; might need to better align market expectations with policymaker expectations."

"Policymakers agreed recent money market developments implied the Fed should soon discuss appropriate level of reserve balances."

"A few policymakers noted the possibility of resuming trend growth of balance sheet to stabilize the level of reserves."

"Several policymakers suggested consideration of a standing repo facility as part of monetary policy implementation framework."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD: Bullish case underpinned by weekend news

The EUR/USD pair has rallied Friday to close with gains for a third consecutive week at 1.1169. There was no particular catalyst for EUR gains. ECB scheduled to meet this week, although no fireworks expected this time.


GBP/USD: Uncertainty or relief? Action granted anyway

Hopes that the UK will avoid a hard-Brexit kept the Pound rallying against all of its major rivals by the end of last week, with GBP/USD finishing it a handful of pips below the critical 1.3000 level.


USD/JPY: Corrective slide to continue on sentiment

The USD/JPY pair closed the week at around 108.40, down Friday for a third consecutive day as the American currency remained under selling pressure. USD/JPY at risk of falling further only if it breaks below 108.00.


Gold turns flat above $1,490 as USD remains under pressure

After dropping to a daily low of $1,485, the XAU/USD pair staged a modest rebound during the American trading hours and turned flat on the day near $1,492.

Gold News

China’s downward economic path offers no escape from its trade problems

There were no surprises in China’s GDP figures as the government portrays an economy slipping steadily lower giving little promise of improvement or support for the waning global expansion.

Read more