Half Point Statement

We have made considerable progress combatting inflation. Risks to our dual mandate are more skewed toward an unwelcome weakening of the labor market than an unexpected and unwelcome rise in inflation. Since there is no meeting in October, and since the path of progress suggests we would cut in October if there was a meeting, the committee felt the prudent course is to act in advance now. We are not embarking on an automatic path that will cut rates every meeting. We remain very data dependent. Every meeting will be a live meeting. A rate cut in November is not a given.

Quarter Point Statement

The economy remains relatively strong. Retail sales and industrial production were better than expected. We have made considerable progress on the inflation front but the committee does not want to prematurely cut too much and risk an unwelcome return of inflation. The prudent course of action is to cut a quarter point now and take a wait and see approach for the next meeting.

Without strong conviction, I think the Fed leans toward a half point.

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