Powell: Near-term inflation expectations have moved up; most longer-term expectations consistent with 2% goal

Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up but remained low through August; more recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months. In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. In considering additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks. The Committee decided to conclude the reduction of its aggregate securities holdings on December 1. The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective. In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals. The Committee's assessments will take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments. Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Susan M. Collins; Lisa D. Cook; Austan D. Goolsbee; Philip N. Jefferson; Alberto G. Musalem; and Christopher J. Waller. Voting against this action were Stephen I. Miran, who preferred to lower the target range for the federal funds rate by 1/2 percentage point at this meeting, and Jeffrey R. Schmid, who preferred no change to the target range for the federal funds rate at this meeting. FOMC STATEMENT COMPARE: pic.twitter.com/1xW7cnChGP *FED CUTS TARGET RANGE FOR BENCHMARK RATE BY 25 BPS, TO 3.75%-4% *FED SAYS IT WILL STOP SHRINKING BALANCE SHEET ON DEC. 1 *FED SAYS SCHMID DISSENTED IN FAVOR OF NO RATE CHANGE *FED SAYS MIRAN DISSENTED IN FAVOR OF HALF-POINT CUT

POWELL: ANOTHER CUT IN DECEMBER IS FAR FROM ASSURED Fed's Powell: Strongly differing views at meeting about how to proceed. FED’S POWELL: IN DECEMBER, FED WILL ENTER THE NEXT BALANCE SHEET PHASE AND HOLD STEADY FOR A PERIOD FED’S POWELL: REINVESTMENT STRATEGY WILL ALIGN WEIGHTED AVERAGE MATURITY MORE CLOSELY WITH THE STOCK OF OUTSTANDING SECURITIES FED’S POWELL: NO DECISION MADE YET ON DECEMBER MEETING; FURTHER RATE REDUCTION IS NOT A FOREGONE CONCLUSION, WITH STRONG VIEWS AND TENSION BETWEEN POLICY GOALS ACROSS THE COMMITTEE

Fed's Powell: Tension between two goals, and strong views across committee. *POWELL: FED HAS NOT MADE A DECISION ABOUT DECEMBER MEETING FED’S POWELL: TODAY’S RATE CUT WAS A RISK-MANAGEMENT MOVE; DECISIONS GOING FORWARD WILL BE A DIFFERENT MATTER Fed's Powell: We can't address both employment, inflation risks with our one tool. FED’S POWELL: NOTES TIGHTENING IN MONEY MARKETS OVER THE PAST THREE WEEKS; ASSESSES RESERVES AS ONLY SLIGHTLY ABOVE AMPLE AND SEES LITTLE BENEFIT IN FURTHER BALANCE SHEET REDUCTION

Fed's Powell: If we see data labour market is stabilizing, or strengthening, it would play into policy decisions. Fed's Powell: Not seeing an uptick in claims, or a downtick in openings, suggests gradual cooling, gives some comfort. FED’S POWELL: IF THERE WERE A SIGNIFICANT CHANGE IN THE ECONOMY, WE WOULD LIKELY DETECT IT Fed's Powell: If there is a high level of uncertainty, that could be an argument for caution on moving. Fed's Powell: For today's rate cut, a strong, solid vote, and the strongly differing views were really about the future.