September 17–18 · Published October 9, 2019
Jerome H. Powell
September 17–18, 2019 FOMC Minutes
Our reading
The minutes read more dovish because they reveal deeper internal concerns about downside risks—such as trade uncertainty, weak global growth, and low inflation expectations—and show that many participants favored the cut as proactive "insurance" to support the economy, whereas the statement’s language is more neutral and forward-looking, emphasizing data-dependence and the FOMC’s commitment to its objectives without detailing the extent of those worries or the debate over future easing.
Our reading compares the minutes of the September 17–18 FOMC meeting with the FOMC statement issued at the end of that meeting, three weeks before the minutes were published.
Vote
- Michelle W. Bowman
- Lael Brainard
- James B. Bullard ↓ dissented
- President Bullard dissented because he believed that lowering the target range for the federal funds rate by 50 basis points at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks. In addition, a 50 basis point cut at this time would help promote a more rapid return of inflation and inflation expectations to target.
- Richard H. Clarida
- Charles L. Evans
- Esther L. George ↑ dissented
- President George dissented because she believed that an unchanged setting of policy was appropriate based on incoming data and the outlook for economic activity over the medium term. Recognizing the risks to the outlook from the effects of trade policy and weaker global activity, President George would be prepared to adjust policy should incoming data point to a materially weaker outlook for the economy.
- Jerome H. Powell
- Randal K. Quarles
- Eric S. Rosengren ↑ dissented
- President Rosengren dissented because he judged that monetary policy was already accommodative. In his view, additional accommodation was not needed for an economy in which labor markets are already tight and could pose risks of further inflating the prices of risky assets and encouraging households and firms to take on too much leverage.
- John C. Williams
From the minutes
FOMC minutes
Voting against this action: James Bullard, Esther L. George, and Eric Rosengren.
President Bullard dissented because he believed that lowering the target range for the federal funds rate by 50 basis points at this time would provide insurance against further declines in expected inflation and a slowing economy subject to elevated downside risks. In addition, a 50 basis point cut at this time would help promote a more rapid return of inflation and inflation expectations to target. President George dissented because she believed that an unchanged setting of policy was appropriate based on incoming data and the outlook for economic activity over the medium term. Recognizing the risks to the outlook from the effects of trade policy and weaker global activity, President George would be prepared to adjust policy should incoming data point to a materially weaker outlook for the economy. President Rosengren dissented because he judged that monetary policy was already accommodative. In his view, additional accommodation was not needed for an economy in which labor markets are already tight and could pose risks of further inflating the prices of risky assets and encouraging households and firms to take on too much leverage.
Consistent with the Committee's decision to lower the target range for the federal funds rate to 1-3/4 to 2 percent, the Board of Governors voted unanimously to lower the interest rate paid on required and excess reserve balances to 1.80 percent and voted unanimously to approve a 1/4 percentage point decrease in the primary credit rate to 2.50 percent, effective September 19, 2019.
It was agreed that the next meeting of the Committee would be held on Tuesday–Wednesday, October 29–30, 2019. The meeting adjourned at 10:40 a.m. on September 18, 2019.
What changed from the previous meeting’s minutes
- Target range lowered from 2 to 2-1/4 percent to 1-3/4 to 2 percent.
- Dissents increased from two to three, with Bullard joining George and Rosengren.
- Bullard preferred a 50 basis point cut; George and Rosengren favored no change.
- IOER rate lowered from 2.10 percent to 1.80 percent.
- Primary credit rate cut from 2.75 percent to 2.50 percent.
- Statement added weakening in business fixed investment and exports; removed August balance sheet runoff end.
Summary generated automatically from the two documents.