Results from the Desk survey—a confidential questionnaire conducted ahead of each Federal Open Market Committee (FOMC) meeting—found that “almost all respondents” expected a 25-basis-point interest rate cut by the conclusion of the Sept. 16–17 meeting.
Monetary policymakers lowered the benchmark federal funds rate—a key rate that influences business and consumer borrowing costs—by a quarter point for the first time since December to a fresh target range of 4 percent to 4.25 percent.
The lone dissenting vote was Fed Gov. Stephen Miran, who advocated for a half-point reduction.
Despite officials overwhelmingly supporting a rate cut, “a few participants stated there was merit in keeping the federal funds rate unchanged at this meeting or that they could have supported such a decision,” according to the minutes.
“Participants expressed a range of views about the degree to which the current stance of monetary policy was restrictive and about the likely future path of policy,” the minutes said.
“Most judged that it likely would be appropriate to ease policy further over the remainder of this year.”
The Desk survey further revealed that the “vast majority” of survey respondents anticipate at least two quarter-point rate cuts by the end of 2025.
Additionally, “around half” believe the Fed will cut rates by a total of three times by the year’s end.
This aligns with the updated Summary of Economic Projections (SEP).
The periodic survey of Federal Reserve officials’ expectations for the broader economy and monetary policy signaled two more quarter-point rate cuts this year, bringing the median policy rate to 3.6 percent.
Expectations for next year were little changed, the minutes stated.
“Respondents’ expectations for 2027 and beyond were unchanged, implying that revisions to respondents’ near-term expectations reflected an anticipation of a faster return of the federal funds rate to its longer-run level than previously expected,” the document said.
Regarding the economic landscape, most meeting participants concluded that downside risks to the labor market had increased. Upside inflation risks have either diminished or not increased.
Additionally, Fed staff adjusted their GDP growth projections higher for 2025 to 2028.
“GDP growth was still projected to be faster next year than this year, as the effects of tariff increases and slower net immigration were expected to diminish,” the meeting summary said.
The so-called dot-plot of individual members’ expectations reported downward revisions to unemployment rate forecasts—4.4 percent in 2026 and 4.3 percent in 2027—and slight upward changes to real GDP growth rates.
Officials Talk Monetary Policy
Since last month’s meeting, a chorus of Federal Reserve officials has discussed their views on the direction of monetary policy and the outlook for the wider economic environment.For some, a deteriorating labor market is a top concern. For others, elevated inflation is the culprit behind not being more aggressive in lowering interest rates.
According to Fed Vice Chair Philip Jefferson, “both sides of our mandate are under pressure.”
“Trends across several data series indicate that the labor market is softening, which suggests that, left unsupported, it could experience stress.
“To balance the risk of persistent above-target inflation and the risk of a deteriorating labor market, I supported a 25 basis point cut in our target range at the last FOMC meeting.”
However, Miran says that while he is optimistic about the economy, he sees potential risks from the Federal Reserve maintaining restrictive monetary policy.
“You need to set policy, not necessarily based on where the data were six months ago, but where you think they’re going to be six months to two years from now, depending on your view of how long those lags are,” Miran said in a discussion.
He also noted that he is “more sanguine” on the inflation outlook than his colleagues, indicating that he believes disinflation from housing services will occur.
Miran is also examining population growth while shrugging off tariff-related effects.
“I’m paying, I think, more attention to something like population growth, or maybe I’m giving it a bigger weight—or I think it has a bigger effect. And I’m also less concerned with the inflationary effects of tariffs as well,” he said.
“So that’s part of what makes me more sanguine on inflation than potentially some of my colleagues are.”
The Fed will hold its next two-day policy meeting on Oct. 28–29.