The Federal Reserve publishes the minutes of the July meeting

Federal Reserve officials who voted in favor of a reduction in interest rates three weeks ago agreed that the change should not be seen as an indication of a "pre-established course" "for future reductions, according to the minutes of the meeting released Wednesday.

The summary indicated that policymakers viewed this decision as a "mid-term adjustment", an expression that President Jerome Powell used at a press conference, after being seen as contributing to a massive sell-off in the US. stock market after the July 30-31 meeting.

The markets have taken into account a series of rate cuts, so that Powell's use of the term spread has raised concerns that the Fed may not be as accommodating as expected with its policy.

In the end, the Federal Open Market Committee, which defines monetary policy, decided to reduce the central bank's benchmark rate by 25 basis points to a target range of 2% to 2.5%. It was the first rate cut for 11 years, linked to the financial crisis.

However, members have not committed to future cuts.

"In their discussions on the prospects for monetary policy beyond this meeting, participants generally supported an approach in which the policy would be guided by the information received and its implications for the economic and social prospects. avoiding any appearance of following a predefined course, "minutes indicated.

The paper goes on to state that "most of the participants" saw the quarter-point reduction "as part of a recalibration of the policy's position, or a mid-point adjustment. -cycle "in response to the changing situation.

"A number of participants suggested that the nature of many of the risks they felt weighed on the economy and the lack of clarity as to when these risks could be solved, were highlights the need for policymakers to remain flexible and focused on the implications of incoming data for prospects, "said the minutes.

The disclosure comes as President Donald Trump repeatedly calls for more aggressive cuts. He wrote several tweets on Wednesday, drawing the attention of Powell and the central bank on their easing pace.

Proponents of rate cuts cited three main factors: a slowdown in economic activity, particularly a reduction in business and manufacturing investment; "risk management" at a time of slowing economic activity and trade tensions; and low inflation, with readings still low on the Fed's 2% target.

The minutes indicated that the "members" of a couple wanted a reduction of 50 basis points, mainly on the basis of low inflation rates. At the same time, "many" did not seek action because the risks had "decreased" since the June meeting.

In the end, even though members agreed that the economy had improved somewhat in the days leading up to the meeting, they accepted the rate cut.

The minutes indicated that those who voted in favor of the reduction felt that this "would better position the general direction of the policy to help counteract the effects on the prospects of low global growth and growth." 39, uncertainty in trade policy, to ensure the risk of a decline in these sources, and to promote a faster return of inflation to the symmetrical target of 2% of the Committee than would otherwise be the case. case. "

These officials felt that this initiative "was part of an ongoing re-evaluation" of the policy initiated in 2018, the year in which the Fed raised rates four times.

Fed presidents Eric Rosengren of Boston and Esther George of Kansas City voted against.

The meeting also discussed the committee's decision to end the reduction in its balance sheet two months earlier.

The Fed had let a capped product of its bond portfolio dissipate each month, resulting in a reduction of more than $ 600 billion in the balance sheet. Members voted in favor of the end of the program as of August 1st rather than the end of September. Some members feared that the end would call into question the Fed's view that its main policy tool would be the funds rate, while others said that maintaining the reduction would have been inconsistent with the reduction of rates.