Fed Chair Powell: Very unusual to have persistent tension between parts of dual mandate

Core Viewpoint - The Federal Open Market Committee (FOMC) is experiencing internal divisions regarding monetary policy decisions, particularly concerning interest rate cuts, indicating a complex economic environment [1][4]. Group 1: FOMC Decision Dynamics - The recent decision saw nine out of twelve members supporting it, reflecting a broad but not unanimous consensus [4]. - There is a notable reluctance among several members to endorse further reductions, suggesting a higher threshold for future cuts [2][5]. - Discussions within the FOMC are characterized as thoughtful and respectful, with members holding strong, differing views on the economic outlook [3][9]. Group 2: Economic Indicators and Data Assessment - The FOMC acknowledges that inflation remains high and the labor market has softened, creating a tension between its dual mandate [2][10]. - Upcoming economic data, particularly from household surveys, may be distorted due to technical issues in data collection, necessitating careful analysis [6][7]. - The committee anticipates receiving significant data by the January meeting, which will be crucial for future policy decisions [8]. Group 3: Risks and Uncertainties - There is a consensus among FOMC members that risks related to unemployment and inflation are skewed to the upside, complicating decision-making [10]. - The committee is positioned to wait and observe how the economy evolves before making further moves, indicating a cautious approach [5][11].