An increasingly divided Federal Reserve that decided to hit pause in its easing cycle following a rate cut at its October meeting offered little guidance on what would cause policymakers to change their minds on the outlook, minutes of the central bank's last policy meeting showed.
The readout released on Wednesday of the October 29-30 policy discussion, at which the Fed voted 8-2 to lower interest rates by a quarter percentage point, also showed policymakers further discussed the possibility of setting up a standing repo facility in the wake of recent ructions in short-term money markets.
"Most participants judged that the stance of policy, after a 25 basis point reduction at this meeting, would be well calibrated to support the outlook of moderate growth, a strong labor market and inflation near the committee's symmetric 2 per cent objective," the Fed said in the minutes.Following the meeting, Fed Chair Jerome Powell signaled the Fed was effectively on hold with interest rates and said that would only change if there was a "material" change in the U.S. economic outlook.
That phrasing, absent from the policy statement at the time, indicated that October's reduction in borrowing costs to a target range of between 1.50 per cent and 1.75 per cent, would be the last rate move over the short term.The Fed has cut interest rates three times this year. The cuts have been positioned as "a mid-cycle adjustment" to help shield the U.S. economy from the effects of the U.S.-China trade war and slowing global growth, which have hurt manufacturing, business investment and exports.
In the minutes, there was little discussion of what a "material" reassessment would involve, bar two policymakers who wanted the Fed to make plain that another rate cut would be unlikely in the near term unless there was a significant slowdown in the pace of economic growth. Dallas Fed President Robert Kaplan has since said the price of his support was such a statement being made.....READ MORE
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