As expected, the Federal Open Market Committee (FOMC) reduced the fed funds range by another 25 basis points to 1.75%-2.00% at its September meeting, making this the second cut since the Federal Reserve stopped hiking interest rates last December. However, we see two bigger takeaways from Wednesday's meeting. First, Fed officials remain divided on the appropriate near-term path for interest rates; and second, the Fed could announce a change to its current balance sheet policy as early as October.
Despite the distribution of FOMC views, we continue to believe that a majority of the current