Minutes Show Most Fed Officials Expect Additional Rate Cuts

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00:00A little bit of movement in terms of the treasury trade, in terms of the equity trade,

00:05not too much. We're seeing really a quiet market here as we get ready to wrap up

00:09just one more day of trading after today in 2025. All right, let's get right out to Washington,

00:14get more on those FOMC minutes. Tyler Kendall, she's Bloomberg TV Washington reporter. She's

00:19live at the Federal Reserve. Tyler, take it away. Yeah, hey, Carol. You really hit most of the main

00:24headlines here when it comes to what is a divided FOMC, with the minutes showing most

00:29officials see additional interest rate cuts as likely appropriate if inflation declines over

00:34time as expected. Yet we did get further signaling from some participants on the committee who

00:39suggested that under their economic outlooks, it would likely be appropriate to keep the target

00:43range unchanged for, quote, some time. According to the minutes, quote, several participants pointed

00:50to the risk of higher inflation becoming entrenched and suggested that lowering the policy rate further

00:56in the context of elevated inflation readings could be misinterpreted as implying diminished

01:02policymaker commitment to that 2 percent inflation goal. Participants judged that a careful balancing

01:08of risks was required and agreed on the importance of well-anchored longer-term inflation expectations

01:14in achieving the committee's dual mandate. Of course, the minutes really are putting a finer

01:19point on the fact that this was a divided FOMC as participants weighed the risks between employment

01:24and inflation. And of course, this was when we got that summary of economic projections and we looked

01:29at the dot plot, which had that range of projections for next year and where policymakers ultimately think

01:35neutral is. I'll give you one other quote that was important to pay attention to here, which is that,

01:40quote, a few of those who supported lowering the policy rate at this meeting indicated that the decision

01:45was finally balanced or that they could have supported keeping that target rate unchanged.

01:50It is clear that these minutes are showing that there's a lot of divisions ahead and it's not

01:55really clear exactly where that policy path is headed. Yeah, exactly, Tyler. And we were looking

02:01to these minutes to perhaps give us a little more detail on just how fractious the committee is right

02:07now. Did we get any more detail on just the, you know, the turbulence within the Fed and the variety of

02:13opinions? Well, of course, there were the main descents, Vani, when it came to the opposite ends of the

02:19policy spectrum. Of course, one of them was clearly defined in that of the newer Fed Governor Stephen

02:24Myron. But we were also paying really close attention when it came to the discussion around

02:29the so-called quiet descents as six policymakers chose not to revise down their forecast for this

02:35year. So as we go through these, we're still sort of trying to piece together exactly where that policy

02:40debate is heading, headed up, because at this point, it's not totally clear exactly the destination that

02:47they are heading to or how quickly perhaps they are going to get to that destination.

02:51Yeah. And in terms of decisions, too, as we look ahead to what the Fed may be doing in 2026,

02:56the other thing we're thinking about, Tyler, is the decision by President Trump as to who will lead

03:01the next head of the Fed or be the next head of the Federal Reserve. That press event yesterday,

03:07he talked about who that he has a preferred candidate. He said he could still fire Jay Powell. I'm just

03:14curious if you're getting any more intel from the White House about who it might be, when we might

03:18get a decision. Right, exactly. Well, we heard President Trump yesterday say that he still has

03:24his favorite pick and that that has not changed and that he will announce him when the time is right,

03:30in President Trump's words, though he did go on to indicate that we can't expect a decision

03:33within the next month. But it comes as the White House is continuing the interviews. Bloomberg News has

03:38confirmed that BlackRock's Rick Reeder will meet privately with President Trump at Mar-a-Lago as we really

03:43zero in on the top four contenders. Our reporting indicates, of course, that that includes Reeder

03:48alongside current Fed Governor Christopher Waller, also interviewed with President Trump earlier this

03:53month, and then, of course, former Fed Governor Kevin Warsh and the NEC director Kevin Hassett. But

03:58really, President Trump has often made perhaps contradictory statements when it comes to his process and how

04:04he's going to choose the next Fed chair. But the one through line, the one consistency has been his

04:09criticism of the current Fed chair, Jerome Powell, as you mentioned yesterday, renewing his attacks on

04:14Powell, including potentially threatening, re-threatening, rather, because we heard this

04:18earlier in the year that there could be a lawsuit over the Fed's renovations to their headquarters where

04:22I am here in Washington. So something to watch closely. But, of course, President Trump has

04:27previously indicated that Powell's job would be safe in a bid to tamp down on the markets.

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