FOMC Meeting Minutes Show Fed Uncertainty In Interest Rate Cut Timing

By Mish Shedlock of MishTalk

Wednesday, July 9, 2025 3:55 PM EDT

(Click on image to enlarge)

Minutes of the Federal Open Market Committee

Please consider the Minutes of the Federal Open Market Committee June 17–18, 2025, released today.

Four Key Points

Participants noted that the available data showed that economic growth was solid and the unemployment rate was low. Participants observed that inflation had come down but remained somewhat elevated.
Participants judged that there were downside risks to employment and economic activity and upside risks to inflation, but that these risks had decreased as expectations about effective tariff rates and their effects had declined from levels in April.
A couple of participants noted that, if the data evolve in line with their expectations, they would be open to considering a reduction in the target range for the policy rate as soon as at the next meeting.
Some participants saw the most likely appropriate path of monetary policy as involving no reductions in the target range for the federal funds rate this year.

CME Fedwatch Expectations

Rate cut expectations based on futures trading were little changed today.

The odds of a rate cut on July 30 are 6.7 percent today up from 6.2 percent yesterday.

September is also little changed. Odds of at least one cut in September are 68.3 percent today, up from 64.6 percent yesterday.

There is no Fed meeting in August.

I Officially Announce my Availability to Become the Next Fed Chair

Earlier today, I commented I Officially Announce my Availability to Become the Next Fed Chair

I have a 15-point plan. Here are the first 5.

Mish’s 15-Point Fed Plan

Explain to the nation why we don’t need a Fed and how independent central banks have created boom-bust cycles of increasing amplitude over time. The main corollary is history shows the one thing worse than independent central banks is a central bank run by politicians, frequently ending in hyperinflation.
Surround myself with qualified insiders who understand the Fed but also believe in the mission to end the Fed.
Stop paying interest on reserves, phased in over 18 months.
Wind down the Fed’s balance sheet totally in 2-3 years.
Require that assets available on demand such as checking and savings accounts are truly available on demand. That means demand deposits are parked in overnight US treasuries. This would be phased in over two years. As a result, we would have genuine safekeeping banks.

When you are clueless about inflation you cannot possibly get policy right. The tendency is to overshoot in both directions creating asset bubbles of increasing amplitude over time.

June 20, 2025: Did the Fed Just Predict a Recession for Later this Year?