Fed Minutes Reveal Divided Opinions on Future Rate Cuts Amid Economic Concerns

Fed Minutes Reveal Division Over October Rate Cut and Doubts About December Move

Washington, D.C., November 19, 2025 — In October, the Federal Open Market Committee met with clear differences. The officials debated if they should cut interest rates. They faced the challenge of a cooling labor market and high price levels. The minutes show that leaders did not agree on how to balance these needs.

October Rate Cut Approved Amid Mixed Views

The committee cut the rate by 0.25 points. They lowered it to a band of 3.75% to 4% in a 10-2 vote. The close vote, rare for the Fed, hints at two main views. One set of officials feels that current rules still slows growth. Another set sees strong economic activity that makes the rules too loose. The leaders stuck close to one another on their word links as they studied new data.

Debate Over December Rate Cut

The documents note deep splits on a possible rate cut in December. A few participants thought another cut might be needed if numbers fit their views. Many raised doubts and warned against cutting rates further in 2025. In Fed language, the word “many” means a larger group than “several.” This choice of word shows that most members lean against a December cut. Since not all voting members join the discussion, the exact strength of the view remains unclear.

Chair Jerome Powell said in a news conference that a December move is not a done deal. This comment shifts from market views that expected a near-certain cut. The CME Group FedWatch tool set the chance of a December cut at about 33% by Wednesday. For January, the probability rose to roughly 66%.

Divergent Perspectives Within the Committee

The split among officials falls into clear lines:

Doves – Governors Stephen Miran, Christopher Waller, and Michelle Bowman back cuts. They tie their views to keeping the labor market growing as hiring cools.
Hawks – Regional Fed Presidents Jeffrey Schmid (Kansas City), Susan Collins (Boston), and Alberto Musalem (St. Louis) worry that easing rules too soon may keep prices high.
Moderates – Chair Powell, Vice Chair Philip Jefferson, and New York Fed President John Williams push for a slow, careful look at future numbers before any move.

One official—likely Miran—saw a larger half-point cut as the path forward, while President Schmid voted to keep rates unchanged.

Data Challenges Amid Government Shutdown

The committee did not have a full view of the economy. A 44-day government shutdown held up key reports on jobs and prices. Powell compared the condition to “driving in the fog” with missing signs. Governor Waller countered that enough data still sits with the Fed to shape its plan.

Balance Sheet Policy Adjustments

The minutes also show that the Fed will pause reducing its holdings of Treasury and mortgage-backed securities from December. This pause comes after the process cut more than $2.5 trillion from the balance sheet, which now sits near $6.6 trillion. With the pause, tightening on this side of the policy becomes milder.

Summary:

The Fed cut rates by 0.25% in October amid different views.
Doubt now surrounds a move in December.
The committee splits among inflation-focused hawks, job-focused doves, and cautious moderates.
A government shutdown delayed clear economic data.
The pace of reducing holdings will slow starting in December.

As the economic path stays unclear, investors and policymakers watch new data and Fed signs to see how policy will shift in 2026. —

For more detailed analysis and market updates, stay tuned to CNBC’s continuing coverage.

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