The Fed is divided on how fast to cut rates. The recap of its last big meeting may give us the inside scoop.

By Jeffry Bartash

FOMC minutes to shed light on debate over interest rates and inflation

New Federal Reserve governor Stephen Miran, left, is trying to shake things up at the central bank, but he's a lone wolf for now.

The Federal Reserve is a house divided on how aggressively to cut interest rates - and a fresh recap of their last meeting could give Wall Street more clues on just how divided they are.

The central bank last month cut interest rates for the first time this year to help shore up a wobbling U.S. jobs market. The vote was a lopsided 11-1.

The only dissenter was Stephen Miran, the former economic adviser to President Donald Trump who argued for an even steeper cut. He was rushed onto the Fed by Republicans just two days before the vote.

What senior Fed leaders were far less in agreement on was whether they should cut rates at their last two meetings of this year, in October and December.

The timing and size of Fed rates cuts is being keenly watched by investors, consumers looking to buy cars and houses and businesses planning to invest. The cost of borrowing is a huge factor in their decisions.

A government shutdown has also delayed the release of critical economic reports such as the September employment survey, putting more weight the the so-called minutes of the Fed meeting on Sept. 16-17.

After the September rate cut, 10 of the 19 most senior Fed officials signaled they would support an extra pair of rate cuts this year. The other nine wanted one or none.

So a house divided, sure, but too much should not be made of this divide.

That's because the real power of the Fed panel empowered to change interest rates, known as the Federal Open Market Committee, is concentrated in the board of governors in Washington.

The governors account for seven of the 12 senior Fed officials, including Chair Jerome Powell, who actually vote on whether to raise or lower borrowing costs. If Fed governors want a rate cut, the board will get one.

The minutes of the FOMC's September minutes, released Wednesday, will offer extra details on how the debate at the Fed unfolded.

"Though we have heard the majority of Fed officials since the meeting, the minutes could nonetheless shed some further light on the wide rift amongst officials with respect to the policy outlook," economists at Deutsche Bank wrote in a note.

Of particular note is how Miran advocated for a steeper rate cut last month, and how other senior Fed leaders responded to his arguments.

Miran pressed for a half-point cut in the Fed's benchmark short-term rate instead of the quarter-point reduction that was later approved.

Miran also supports half-point cuts at each of the Fed's next two meetings, a summary of the vote showed. No other Fed member was close to his view.

Several other members of the Fed, such as governors Chris Waller and Michele Bowman, have been very sympathetic to the argument for faster rate cuts to help the labor market. But not that sympathetic.

The minutes could help underscore what kind of reception that argument got from other members who were more skeptical.

Waller in particular has been the ringleader of the argument that the Trump administration's tariffs would lead to just a onetime rise in inflation that would fade by early next year.

He believes the rate of inflation will once again slow toward the Fed's 2% target in the long run as the trade wars die down.

Most other top Fed officials have come around to that point of view, but some are worried about cutting interest rates too aggressively lest inflation gets stuck around its current level of 3%.

They want to reduce interest rates more slowly to avoid the risk of overstimulating the economy - and potentially pushing inflation even higher.

-Jeffry Bartash

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10-08-25 1012ET