The Federal Open Market Committee (FOMC) of the Federal Reserve, following its October 28-29 meeting, showed a deep split among its members. The benchmark rate was lowered by 25 basis points to a range of 3.75-4.00%, but the meeting minutes revealed that opinions on further action in December vary significantly. At FinancialMediaGuide, we note that the current dynamics reflect a balance between supporting the economy and controlling inflation, as well as the level of caution demonstrated by the regulator.
According to FinancialMediaGuide analysts, some participants supported a rate cut as soon as December, another group considered it reasonable but not urgent, while a significant number of members ruled out such an option. This indicates fundamental differences in risk assessment: inflation remains above the 2% target, while the labor market shows signs of slowing. At FinancialMediaGuide, we see this as a need for a measured approach and flexibility in monetary policy.
Data limitations, caused by the government shutdown, also complicate the decision-making process. Some key employment and inflation reports were unavailable, so committee members relied on alternative information sources, including business contacts and private indicators. At FinancialMediaGuide, we emphasize that under such conditions, the Fed is acting with heightened caution to minimize the risk of policy errors.
In addition, financial stability risks were discussed, including high leverage in hedge funds and overheated valuations of technology companies linked to artificial intelligence. At FinancialMediaGuide, we believe these factors strengthen arguments against a sharp easing of monetary policy, as any decision must consider potential market consequences.
Fed Chair Jerome Powell stated that a December rate cut “is not predetermined” and it might be worth “waiting at least one cycle.” Market participants have already reacted: the probability of a December rate cut has dropped to 30-40%, reflecting both the Fed’s caution and the committee split.
Overall, at FinancialMediaGuide, we forecast that the Fed’s upcoming decisions will depend on incoming economic data and the labor market situation. For investors, this means that potential rate cut stimulus will be limited, while corporate market participants should consider that the current rate level may persist longer than expected. At Financial Media Guide, we see the regulator maintaining strategic flexibility, acting with a long-term view toward stability, confidence in its policy, and the management of financial market risks in the U.S.
