Although the Federal Reserve's rate cut this time was in line with expectations, the internal divisions set a record — the first time since 2019 that there have been three dissenting votes.

Even more shocking, the board member pushed by Trump, Milani, still insisted on a 50 basis point cut, while two regional Fed presidents and four non-voting members directly advocated for no change. Including these individuals, a total of seven people opposed the current decision, and it is said that this level of disagreement is the most serious in 37 years.

The wording changes in the meeting statement are also very subtle. They reiterated that inflation is still somewhat high, and that recent months have seen increasing downside pressure in the employment market, but they removed the previous statement that the unemployment rate "remains low" and replaced it with "has slightly risen as of September." More importantly, the statement added a new sentence about considering the "magnitude and timing" of further rate cuts, which market participants generally interpret as raising the bar for easing.

There was an important move in reserve management: the statement indicated that reserves have reached an adequate level, and to maintain this level, short-term government bonds will begin purchasing this Friday. The New York Fed plans to buy $40 billion in short-term debt over the next 30 days, and it is expected that the scale of reserve management purchases in the first quarter of next year will remain high(RMP).

From the dot plot, the median rate expectation remains unchanged from last time, implying that there could be one rate cut each next year and the year after. However, the rate forecast for next year is slightly more dovish than last time — the number of people expecting no rate cuts decreased by one, down to seven.

Regarding economic outlook, they raised their GDP growth expectations for this year and the next three years, while slightly lowering inflation expectations for this year and next, and the unemployment rate forecast for the following year.

Media outlets dubbed as the "New Federal Reserve News Agency" said that the Fed is hinting that it might not cut rates temporarily anymore, because the internal disagreement over whether inflation or employment issues are more urgent is "rare." The crack among the voting decision-makers is the most apparent in six years.