""In the committee's discussions at this meeting, there were strongly differing views about how to proceed in December," Powell said in a post-meeting news conference. "A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it," Powell said. Two members of the Fed policy committee dissented, one (governor Stephen Miran) favoring a bigger rate cut and another (Kansas City Fed president Jeffrey Schmid) favoring leaving rates steady."
"By the numbers: Powell's comments on December's status quickly moved markets. Stocks turned negative almost immediately, and yields on 2-year Treasuries rose 9 basis points, as markets slashed bets on another cut. Driving the news: Wednesday's reduction brings the federal funds rate to a range of 3.75%-4%. The policy-setting Federal Open Market Committee also said it will conclude shrinking its multitrillion-dollar balance sheet on Dec. 1, reflecting recent tensions in money markets."
Policy rate reduced to a 3.75%-4% range and balance-sheet shrinking will end on Dec. 1. Committee members held strongly differing views about December policy, and a further reduction in the policy rate at the December meeting is not a foregone conclusion. Two committee members dissented, one favoring a larger cut and another favoring steady rates. Available evidence indicates layoffs and hiring remain low and downside risks to employment have risen. Markets reacted quickly: stocks turned negative and 2-year Treasury yields rose as traders pared bets on another cut. Government data releases are delayed by a shutdown, limiting official economic information.
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