US Fed officials split on cut, notes show

A few Federal Reserve officials were reluctant to support the central bank's interest rate cut in September, minutes from the Fed's latest meeting showed, emphasising the extent of the divisions that have emerged between policymakers over what to do about borrowing costs.

- COLBY SMITH

The record of the September meeting, when policymakers lowered interest rates by a quarter of a percentage point, underscored the tough balancing act ahead for the Fed as it contends with both a softening labour market and higher inflation. The decision, which shifted interest rates to a new range of 4% to 4.25%, was officially supported by every Fed official except one. It was the Fed's first rate cut this year.

Stephen Miran, who was sworn in just before the start of the two-day meeting, voted instead for a more aggressive, half-point reduction. Mr Miran, who was most recently a top economic adviser to President Donald Trump, also stood apart from his new colleagues in projections released by the Fed.

He signalled the need for borrowing costs to fall roughly 2 percentage points lower than current levels. Most officials pencilled in an additional half-point reduction this year, which would bring interest rates down to 3.5% to 3.75%. However, seven of the 19 policymakers who submitted forecasts indicated that they did not see a need to cut further this year, while two predicted just one more quarter-point move.

The minutes show the range of views that Jerome Powell, the chair, is now having to manage.