The Fed cut interest rates by 25 basis points and will end balance sheet reduction in December, with increasing divisions among committee members.

On October 30, the Fed lowered the benchmark interest rate by 25 basis points to 3.75%-4.00%, marking the second consecutive meeting of rate cuts, in line with market expectations. Two members cast dissenting votes, indicating increasing divisions. Among them, Kansas Fed President George opposed the rate cut and supported keeping rates unchanged; Director Mester disagreed with this interest rate decision, believing that rates should be cut by 50 basis points.

In addition, the Fed FOMC statement announced that it will end the balance sheet reduction on December 1, with current monthly reductions of 5 billion USD in Treasury bonds and 35 billion USD in MBS. After that, the principal of the mortgage-backed securities redeemed will be reinvested in short-term Treasury bonds.

Full text of the Interest Rate Decision:

Available indicators show that economic activity is expanding at a moderate pace. Employment growth has slowed this year, and the unemployment rate has edged up slightly, but it remains at a low level as of August; more recent indicators are consistent with the aforementioned trends. Inflation has risen since the beginning of the year and remains at relatively high levels.

The committee's goal is to achieve maximum employment and a long-term 2% inflation rate. The uncertainty surrounding the economic outlook remains high. The committee is closely monitoring the risks on both sides of its dual mandate and believes that the downside risks to employment have increased in recent months.

To support the aforementioned goals and taking into account the changes in risk balance, the committee has decided to lower the federal funds rate target range by 25 basis points to 3.75% to 4%. In considering further adjustments to the federal funds rate target range, the committee will carefully assess the latest data, changes in the economic outlook, and risk balance. The committee has also decided to end its reduction of the total amount of securities held starting December 1. The committee is firmly committed to supporting maximum employment and bringing inflation back to the 2% target level.

In assessing the appropriate monetary policy stance, the committee will continue to monitor the impact of new information on the economic outlook. If risks emerge that may hinder the achievement of the committee's goals, the committee will adjust its monetary policy stance as appropriate. The committee's assessment will take into account a wide range of information, including labor market conditions, inflationary pressures and inflation expectations, as well as the latest developments in financial and international markets.

The members voting in support of this monetary policy action include Chair Jerome H. Powell, Vice Chair John C. Williams, 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.

The members voting against were Stephen I. Miran, who favored lowering the federal funds interest rate target range by half a percentage point at this meeting, and Jeffrey R. Schmid, who preferred to keep the interest rate range unchanged at this meeting.