Fed Minutes indicate continued gradual easing of monetary policy

The minutes of the Federal Open Market Committee (FOMC) meeting on September 17-18 indicated that, while the Committee members acknowledged a drop in inflation, they continued to view solid GDP growth and a robust labor market. Almost all members believed that recent monthly inflation figures showed a durable return to the 2% inflation objective

Furthermore, it was observed the employment situation   improved in comparison to the pre-pandemic period, and present conditions are on track to meet or exceed the Committee's ultimate goal of full employment.

In terms of policy, most   preferred lowering the federal funds target range by 50 basis points to better align with recent inflation and labor market data. A few individuals supported a 25 basis point decrease, implying that they may have opted for a slower pace.

Attendees predicted that if the evidence matched the expectations, it would be appropriate to gradually shift to a more neutral policy posture. This viewpoint was not as solid as in previous minutes, which suggested lowering the target rate for the future meeting.

Furthermore, the participants stressed the need of communicating that this change should not be construed as a hint that the rate of policy relaxation would grow beyond their assessment of the appropriate trajectory.