FOMC Minutes Reveal a Much More Divided Fed

The transcript discusses the Federal Reserve's decision on September 21st to keep the benchmark rate unchanged, revealing internal divisions within the Fed. The debate centers around labor market slack, with some members advocating for a rate increase due to tight labor conditions, while others argue for maintaining low rates to draw more people into the workforce. Concerns about the Fed's credibility and economic leverage are also raised. The possibility of a rate hike on November 2nd is considered unlikely due to recent labor force data and the proximity to the federal election.

What was the outcome of the Federal Reserve's policy meeting on September 21st?

• The benchmark rate was kept unchanged.

• The benchmark rate was abolished.

• The benchmark rate was decreased by 1/4 point.

• The benchmark rate was increased by 1/4 point.

What is the main concern of those who wanted to raise rates at the last meeting?

• The labor market is too loose.

• The labor market is too tight, risking inflation.

• The labor market is irrelevant to rate decisions.

• The labor market is perfectly balanced.

What argument supports keeping rates low according to New York Fed President Bill Dudley?

• It will draw more people into the workforce.

• It will increase inflation.

• It will decrease unemployment permanently.

• It will stabilize the stock market.

What concern is raised about the Fed's credibility?

• The Fed's low rates are causing economic issues.

• The Fed's decisions are inconsistent.

• The Fed is not transparent enough.

• The Fed is too transparent.

Why is a rate hike before the federal election considered unlikely?

• The labor market is irrelevant to the decision.

• The labor market showed a big jump in participation.

• The labor market is stable.

• The labor market is shrinking.