Federal Reserve officials are split on interest rates, with Kansas City Fed President Jeffrey Schmid advocating against lowering rates despite concerns about a weakening labor market. The Federal Open Market Committee voted to cut the Federal Funds Rate target to 3.75% to 4.00%, the second reduction in two months to boost the economy.

Schmid believes the economy is showing momentum and monetary policy is only modestly restrictive. Inflation remains above the Fed’s 2% target, but there are signs of a weakening labor market. Fed Chair Jerome Powell is not set on another rate cut in December, citing concerns about inflation.

Schmid, a monetary hawk, voted against the rate cut, citing a balanced labor market and the need to keep demand down to reduce price pressures. Dallas Fed President Lorie Logan also disagreed with the decision, emphasizing the need for clear evidence of falling inflation or cooling labor market before cutting rates further.

The CME FedWatch Tool shows a 63% chance of a rate cut in December, down from near-certain expectations before the October FOMC meeting. Investors are uncertain about a December cut after Powell’s comments, with concerns about inflation and a stable job market potentially impacting future rate decisions.

The next FOMC meeting is scheduled for December 9-10.

Read more at Yahoo Finance: Fed official warns inflation is still too high for more rate cuts