The FOMC overcame its divisions to vote for another interest rate cut today, albeit with three dissenting votes. The hawks on the Committee had a clear influence on the accompanying policy statement, which notes that the FOMC will now consider both “the extent and timing” of additional policy rate adjustments. The new Summary of Economics Projections (SEP) shows that the FOMC still expects one more interest rate cut next year, but the range of projections is unusually wide, even if we exclude Stephen Miran’s extreme views. Either way, we doubt that the Fed will cut again until after a new Chair replaces Jerome Powell in May.
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