Some participants noted financial conditions suggested policy may not be “particularly restrictive”
Those participants judged a cautious approach to future policy was warranted
Almost all participants supported quarter-percentage-point cut to Fed funds rate at September meeting
Most participants judged downside risks to employment had increased, upside risks to inflation had either diminished or not increased
Participants generally noted their judgments about appropriate policy action at September meeting reflected a shift in the balance of risks
A few participants saw merit in keeping Fed funds rate unchanged at September meeting or that they could have supported such a decision
A majority of participants emphasized upside risk to their outlooks for inflation
Fed staff revised up GDP growth projection for 2025 through 2028 (we don't get the actual forecasts)
Upward revision reflected stronger-than-expected consumer spending and business investment, and slightly easier financial conditions
Inflation forecast mostly unchanged, projected to reach 2% by 2027 and stay there in 2028
Staff continued to view the risks around the inflation forecast as skewed to the upside
Last month saw job risks rising but remained wary about inflation
The Fed minutes showed officials edging toward easier policy as most participants agreed it would likely be appropriate to cut rates further over the remainder of 2025. A few still saw merit in holding steady, but the tone clearly shifted toward easing. Downside risks to employment were noted to have increased, while inflation risks had diminished or stabilized. Some members flagged that financial conditions may no longer be “particularly restrictive,” which is an indication that they've noticed the rally in stock markets. The staff also revised up GDP growth projections through 2028, reinforcing confidence in the outlook even as policymakers lean toward more accommodation ahead.
The US dollar is a tad higher on the report.
