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Several participants saw case for a rate cut in July, Fed minutes shows
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Fed minutes indicate that several fed officials saw a case for cutting rates by 25 basis points in July meeting but decided to wait for more data.
“Several observed that the recent progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision,” the minutes read.
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The minutes also indicate that majority of the participants see the need for a rate cut in the September meeting if the data continue to come in as expected and that most of them expect further disinflation in the coming months.
“The vast majority observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting.”
“Almost all participants observed that the factors that had contributed to recent disinflation would likely continue to put downward pressure on inflation in coming months.”
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Many officials also pointed out that the risks to the employment goal have increased, adding that reported payrolls gain maybe overstated.
“A majority of participants remarked that the risks to the employment goal had increased, and many participants noted that the risks to the inflation goal had decreased.”
" However, many participants noted that reported payroll gains might be overstated, and several assessed that payroll gains may be lower than those needed to keep the unemployment rate constant with a flat labor force participation rate."