The "vast majority" of participants supported a 50 basis point interest rate cut.

The minutes revealed that only one person voted against a 50 basis point cut, but "some" participants believed there was a reason to cut by 25 basis points at the July meeting, with others thinking a 25 basis point cut was in line with the gradual normalization of policy, and "a few" might have supported a 25 basis point cut in September.

A few believed that a 25 basis point cut might suggest a more predictable policy path, while others thought that determining the extent of policy constraints was more important than the initial cut magnitude.

Monetary policy has no preset course and depends on economic development, economic prospects, and the balance of employment and inflation risks.

There are differing views within the Fed on the degree of tightening, with some emphasizing that even with rate cuts, balance sheet reduction may continue for some time.

Due to weaker labor market indicators, Fed staff have downgraded economic growth forecasts for the second half of this year; almost all policymakers believe that the downside risks to the employment outlook have increased, and the risks to achieving inflation and employment targets are roughly balanced.

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Almost all policymakers are more confident that inflation will continue to fall to the target, with some saying that nominal wage growth continues to slow, and others saying that wage increases are unlikely to become a widespread source of inflationary pressure in the near term.

The "new Fed mouthpiece": The minutes show that the vast majority of officials support a more substantial rate cut, as the economy is robust, unemployment is low, and inflation remains above target; an unspecified number of officials believe a modest rate cut is reasonable; the minutes mention less about which factors will determine future decisions.

The latest meeting minutes reveal the significant internal disagreement within the Fed three weeks ago over the decision to make a substantial rate cut. Although only one person ultimately voted against a 50 basis point rate cut, during the discussion, "some" policymakers favored a more conventional cut of 25 basis points, and "a few" might have voted in favor of a 25 basis point cut.Nick Timiraos, a seasoned Federal Reserve reporter known as the "new Fedwire," also mentioned in his subsequent article the disagreements exposed by the minutes of the meeting, summarizing them as: "A 'substantial majority' of officials supported a more substantial 50 basis point rate cut, while some officials supported a smaller 25 basis point rate cut."

Timiraos' article points out that the Federal Reserve typically prefers to adjust interest rates in increments of 25 basis points because it allows Fed officials more time to study the impact of policy adjustments. The minutes of this meeting show that an unspecified number of officials believed that a smaller rate cut in September was justified given the robust economic activity, low unemployment rate, and inflation rate still above the Fed's target.

The article states that the minutes mentioned little about which factors will determine future interest rate decisions, stating that if inflation continues to fall towards the Fed's 2% target and employment continues to grow in line with recent trends, "then over time, it may be appropriate for the policy stance to shift towards a more neutral position."

"Some" participants believed there was a reason to cut by 25 basis points at the previous meeting, while "a few" might have supported this reduction in September.

On Wednesday, October 9th, Eastern Time, the Federal Reserve released the minutes of the meeting, showing that at the Federal Open Market Committee (FOMC) meeting ending on September 18th, given the progress made in reducing inflation and the belief by "almost all" participants that the risks to employment and inflation targets were broadly balanced, the decision-makers unanimously agreed that a rate cut was appropriate, but they disagreed on the magnitude of the reduction.

The minutes stated, "A substantial majority of participants supported a significant rate cut of 50 basis points. They generally believed that this 'recalibration' of the monetary policy stance would begin to align the stance more closely with recent inflation and labor market indicators. They also emphasized that this move would help maintain the strong momentum of the economy and labor market, while continuing to promote downward progress in inflation and reflecting a balanced risk of employment and inflation.

In contrast, other decision-makers supported a smaller rate cut of 25 basis points, and some pointed out that there was a reason to cut by 25 basis points at the previous meeting in July. The minutes wrote:

"Some participants noted that there was a reason to cut by 25 basis points at the previous meeting, and the data released between the two meetings further demonstrated that inflation is sustainably moving towards 2%, while the labor market continues to cool."And due to inflation remaining high to some extent, economic growth remaining robust, and unemployment rates remaining low, some participants indicated that they would have preferred to lower the target range for the policy rate by 25 basis points at this meeting. A few others stated that they might have supported such a decision.

Several participants noted that a 25 basis point rate cut is in line with the gradual normalization of monetary policy, which would allow policymakers time to assess the restrictiveness of policy as the economy evolves.

A few participants also said that a 25 basis point rate cut might signal a more predictable path for policy normalization. A few participants pointed out that what is more important in determining the degree of policy restrictiveness is the overall path of policy normalization, rather than the specific magnitude of the initial easing at this meeting.

According to the above statements, the number of Federal Reserve policymakers who support a 25 basis point rate cut should be more than what is reflected in the post-meeting resolution statement, which suggests only one person.

The resolution statement shows that among the FOMC voting members, 11 people agreed to cut the rate by 50 basis points, with only Federal Reserve Governor Bowman dissenting, advocating for a 25 basis point cut. As a result, Bowman became the first Federal Reserve Governor to vote against the majority of the FOMC's decision since 2005.

Monetary policy decisions depend on economic development, the impact on economic prospects, and the balance of employment and inflation risks.

In discussing the outlook for monetary policy, Federal Reserve policymakers emphasized the need to communicate to the outside world that the rate cut should not be seen as evidence that the Federal Reserve expects a poor economic outlook. They believe that decisions depend on the development and changes in the economic situation, the impact on economic prospects, and the balance of risks on both employment and inflation. The minutes state:

"Participants emphasized the need to convey that the repositioning of the policy stance at this meeting should not be interpreted as evidence of a less favorable economic outlook, nor should it be interpreted as implying that the pace of policy easing will be faster than the participants' assessment of the appropriate path.""Participants generally agreed that it was important to convey the message that the (FOMC) Committee's monetary policy decisions depend on the evolution of the economy, the impact on the economic outlook, and the balance of risks, and therefore are not on a preset course."

Different Views on the Degree of Tightening, Balance Sheet Reduction May Continue for Some Time

The minutes also mentioned that there were differing views within the Federal Reserve on the current degree of monetary policy tightening. Some emphasized the need to communicate externally that even if interest rates are lowered, the reduction of the balance sheet (balance sheet reduction) may continue for some time.

"Those who commented on the degree of monetary policy tightening indicated that they believe monetary policy is tight, although they expressed a range of views on the degree of tightening."

"Several participants discussed the importance of communicating that even if the (FOMC) Committee lowers the target range for the federal funds rate, the ongoing reduction of the Federal Reserve's balance sheet may continue for some time."

Almost All Policymakers Believe the Downside Risk to the Employment Outlook Has IncreasedIn terms of economic prospects, at the September meeting, the Federal Reserve staff forecasted that the U.S. economy would remain robust, with the projection for real GDP growth being roughly the same as that of the July meeting, but the unemployment rate was slightly higher than the July expectation. The minutes stated:

"Although the real GDP growth in the second quarter was stronger than the staff's expectations, the economic growth forecast for the second half of this year was revised downward, mainly due to recent labor market indicators being weaker than anticipated."

When discussing the risks and uncertainties related to the economic outlook, participants pointed out that the risks of employment decline have increased. The minutes stated:

"Almost all participants believed that the upside risks to the inflation outlook have diminished, while the downside risks to the employment outlook have increased. Therefore, these participants now assess that the risks to achieving the dual mandate goals of the (FOMC) committee are roughly balanced."

Almost all policymakers have more confidence in inflation continuing to fall to the target.

In terms of the inflation outlook, the minutes showed that "almost all participants indicated that their confidence in inflation continuing to converge towards 2% has strengthened" and listed some factors that may continue to exert downward pressure on inflation.

These factors include a further moderate slowdown in real GDP growth due to the Federal Reserve's monetary tightening; well-anchored inflation expectations; weakened pricing power; increased productivity; and softening global commodity prices.

Several participants pointed out that the growth of nominal wages continues to slow down, and a few participants pointed out that there are signs that wage growth will further decline. These signs include a decrease in the growth rate of cyclically sensitive wages and data indicating that those who change jobs no longer receive higher wages than other employees. A couple of participants pointed out that the slowdown in nominal wage growth will be particularly helpful for the downward pressure on inflation in the service industry, as wages account for a large proportion of the costs of service industry enterprises.Additionally, several participants noted that, given the approximate balance between supply and demand in the labor market, wage increases are unlikely to become a widespread source of inflationary pressure in the near term.

Regarding service prices in the housing market, some participants indicated that inflation may soon decelerate, reflecting a slowdown in the pace of rent increases faced by new tenants. Participants emphasized that the inflation rate remains somewhat elevated, and they are firmly committed to bringing inflation back down to the Federal Reserve's target of 2%.