Fed: minutes, bankers divided on rate cut

Federal Reserve officials disagreed at their December meeting (9-10 December) on cutting interest rates.

This is what emerges from the minutes, which have just been published.

Although the Federal Open Market Committee approved a cut, many bankers at the meeting were also prepared to support the decision to keep rates stable.

The 'majority of participants' supported the cut, with 'some' considering it a move 'that would help stabilise the labour market'. Others, however, "expressed concern that progress towards the Committee's 2 per cent inflation target had stalled".

"Some participants suggested that, depending on their economic outlook, it would probably be appropriate to keep the target range unchanged for some time after the reduction decided on at this meeting," the minutes read. For most participants, however, further cuts are desirable in case inflation falls as expected.