Divided Fed policymakers stake out positions ahead of December meeting

Core Viewpoint - The Federal Reserve is experiencing a significant internal debate regarding the current economic conditions and the associated risks, particularly as it approaches its next policy meeting amid a government shutdown that has halted data releases [1]. Group 1: Policy Debate and Economic Conditions - Fed Governor Lisa Cook highlighted the conflicting risks to employment and inflation, suggesting that the upcoming December meeting remains a possibility for a rate cut, but it is not guaranteed [2]. - Cook expressed concerns that maintaining high rates could negatively impact the labor market, although it remains solid for now, while also warning that excessive rate cuts could destabilize inflation expectations [3]. - The dual mandate of the Fed is under tension, prompting Cook to closely monitor labor market and inflation data [3]. Group 2: Internal Division Among Fed Officials - A notable split among Fed officials was evident from a recent 10-2 policy vote to lower the benchmark interest rate to the 3.75%-4.00% range, marking only the third instance of dissenting opinions for both tighter and looser monetary policy since 1990 [4]. - Fed Chair Jerome Powell acknowledged the deep divide in opinions regarding future actions, indicating that another rate cut at the December meeting is not assured [5]. - Fed Governor Stephen Miran reiterated his support for significant interest rate cuts, arguing that strong stock and corporate credit markets do not imply that monetary policy is overly accommodative [5].