Fed: Most Policymakers Oppose December Rate Cut


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Most policymakers on the Federal Reserve oppose an 
interest rate cut in December and favor keeping monetary policy unchanged 
through the year-end, according to minutes of the central bank's latest policy 
meeting published on Wednesday (11/19) .

   "Many participants suggested that, under their economic outlooks, it would 
likely be appropriate to keep the target range unchanged for the rest of the 
year," the Federal Open Market Committee (FOMC), the rates-setting panel of the 
central bank, said in the minutes of its October 29 meeting.  

   FOMC members also unanimously agreed that monetary policy was "not on a 
preset course", the Fed said. A decision on rates would be supported by "a wide 
range of incoming data, the evolving economic outlook and the balance of 
risks", according to the minutes. 

   Intense expectations have built across financial markets for a third 
straight rate cut this year at the FOMC's December 10 meeting. The panel had 
voted for back-to-back  point reductions at its September and October 
meetings.

   The Fed acknowledged those expectations in the minutes published Wednesday, 
saying investors had been leaning on "another 25 basis point lowering at the 
December meeting." At the same time, the central bank said "some uncertainty" 
had since arisen to push back on that, including mixed patterns in U.S. 
employment and inflation.

   Economists say the near-term U.S. outlook had been complicated by a record 
43-day long federal government shutdown that led to a blackout of key 
macroeconomic and other data between October and early November.

   The last time the U.S. Labor Department published the monthly non-farm 
payroll report was in September, when it reported an addition of 22,000 jobs 
for August -- one of the weakest in years. The department has not said when the 
October report will be published.

   The Bureau of Labor Statistics published the Consumer Price Index (CPI) data 
for September on October 24, reporting a 3% annual inflation growth that was 
above the Fed's preferred target of 2%. The next CPI report is due on December 
10 -- the same day as the next FOMC meeting.

    




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