Several Federal Open Market Committee participants saw a “plausible case” for reducing the federal funds rate at their most recent meeting, although the committee settled on holding the target range at 5.25% to 5.5%, according to minutes from the FOMC’s July 30-31 meeting.
According to the minutes, FOMC participants observed that recent indicators suggested that economic activity has expanded at a solid pace, job gains had moderated and the unemployment rate had moved up but remained low. While the rate of inflation remained above the Federal Reserve’s 2% target, it had eased over the past year and recent incoming data indicated some progress toward returning it to that target.
All participants agreed not to change the target range for the federal funds rate. However, “several observed that the recent progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision,” according to the minutes.
