The minutes of the Federal Open Market Committee (FOMC) meeting in September, recently released by the Federal Reserve (Fed), have attracted significant attention from the market. Although the meeting lowered interest rates by 25 basis points as expected, the content of the minutes revealed significant disagreements among decision-makers, making Wall Street investors feel particularly cautious.

As a result, the S&P 500 Index fell slightly by 0.4%, while U.S. Treasury bonds and the dollar strengthened, reflecting that funds are seeking safety.

The meeting minutes indicate that there is a significant divergence among Federal Reserve officials regarding the future direction of interest rates. The target range for the federal funds rate has been adjusted to 4.0%–4.25%, and most officials believe that the current policy stance is closer to a "neutral" level, which helps alleviate pressure in the labor market and address the decline in inflation. However, the risks in the labor market remain an important consideration in decision-making.

Most officials believe that further interest rate cuts may be necessary this year, but the committee is facing a dilemma in weighing stubborn inflation against a weak labor market, making it difficult to reach a consensus on which issue is more pressing.

It is worth noting that the meeting minutes indicate that the current financial conditions suggest that the monetary policy's suppressive effect on inflation is not particularly evident. Therefore, officials emphasized the need for a cautious approach. Among them, 10 Federal Reserve officials hinted that they expect two more interest rate cuts this year, while 9 officials believe that the status quo should be maintained.

This divergence highlights the complex situation the Federal Reserve faces in formulating monetary policy and explains why there is uncertainty in the market's expectations for future interest rate trends. Investors are closely monitoring upcoming economic data and statements from Federal Reserve officials for more clues on policy direction.

As the global economic situation continues to change, the Federal Reserve's decisions will continue to play a key role in the financial markets. Market participants need to remain vigilant and be ready to adjust their investment strategies to respond to potential policy shifts.