Fed Minutes Show Divisions on December Rate Cut

Federal Reserve officials revealed deep divisions over their recent interest rate decision, with minutes from their December meeting showing that the quarter-point cut was far from unanimous, highlighting uncertainties about the economy's biggest risks.

At the Federal Open Market Committee's meeting on December 9 and 10, the 12 voting members approved a reduction in the federal funds rate by 0.25 percentage points, bringing it to a range of 3.50% to 3.75%, the lowest level in nearly three years. This marked the third such cut in 2019, aimed at supporting economic growth amid signs of slowing hiring. The decision passed by a 9-3 vote, a rare display of dissent for a body that usually operates by consensus. Two officials favored holding rates steady, while one advocated for a more aggressive 0.50 percentage point decrease.

The minutes, released on Tuesday, exposed a fundamental split among the 19-member committee on whether sluggish job growth or persistent inflation posed the greater threat. Participants who prioritized weak employment data argued for further easing to encourage borrowing and investment. Those concerned about inflation, which remained above the Fed's 2% target,...