Federal Reserve officials were largely in agreement during their September meeting that interest rates should be lowered to support the weak job market. The only difference of opinion was about how many rate cuts should happen this year, according to the meeting minutes released on Wednesday.
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Almost All Members Supported Two More Interest Rate Cuts
Nearly all members of the Federal Open Market Committee (FOMC) agreed that lowering the federal funds rate was the right move. They believed that with the latest cut already approved in mid-September, the Fed was now in a good position to react quickly to any new economic changes.
Federal Reserve Two Interest Rate Cuts
The officials were divided on whether there should be two or three total rate cuts for 2025, including the one made in September. The “dot plot,” which shows members’ rate expectations, revealed a narrow split — 10 members expected two more cuts, while 9 expected three.
Details of the September Cut
The Fed decided to lower its key interest rate by 0.25% (or 25 basis points), bringing it to a range of 4%–4.25%. The vote passed 11–1. Most participants favored making another two small cuts in the remaining meetings of this year and one more in both 2026 and 2027. Over the long term, they expect the rate to settle around 3%.
Dissent from New Governor Stephen Miran
This meeting was the first for Governor Stephen Miran, who had just joined the Fed. He stood out as the only member who wanted a bigger, 0.5% cut instead of 0.25%. Although the minutes didn’t name individuals, the post-meeting statement confirmed his dissenting vote. Later, Miran said publicly that he had supported a more aggressive easing path than the majority.
Market Expectations Matched Fed Outlook
The Fed’s own survey of financial institutions also showed similar expectations. Most respondents anticipated a 25-basis-point cut in September and about half predicted another cut in October. In general, nearly all expected at least two cuts before the end of the year, and about half foresaw three.
Understanding Basis Points
One basis point equals 0.01%. Therefore, a 25-basis-point cut means the interest rate was lowered by a quarter of a percentage point.