The Fed’s rate cut last week of 25 bps brings the funds benchmark down to 3.75-4.00%. That’s roughly 150 bps lower than its peak back in July 2023. Buried in this news were two interesting developments. 

Chair Powell remarked that “there were strongly differing views on how to proceed in December.” Of the twelve FOMC members, there were two dissenting votes – one in favor of a stronger 50 bps cut, the other in favor of leaving rates unchanged. A similar split occurred in July, the first time since 1993 that as many as two members dissented. 

While perhaps indications of future disagreements, these votes are a far cry from 1973 when major inflationary shocks – food prices and oil supplies – created deep philosophical debates about monetary policy. In October of that year, a motion on a 10.5% funds rate target squeaked by with a 6-5 vote.