The Central Bank Federal Reserve (Fed) revealed significant internal disagreements in the process of cutting the benchmark interest rate in December. Some Fed Commissioners said the decision was "a close call," indicating they saw a hold as a viable option.

On the 10th (local time), Powell, chair of the U.S. Federal Reserve, holds a press conference after the two-day Federal Open Market Committee meeting at the Federal Reserve in Washington, DC. /Courtesy of Reuters-Yonhap

According to the minutes of the Federal Open Market Committee (FOMC) meeting on Dec. 9–10, released on the Fed's website on the 30th (local time) and totaling 19 pages including the cover, even some Commissioners who supported the rate cut said they could have supported holding the benchmark rate when considering the risks facing the U.S. economy.

The Associated Press reported that the minutes showed Fed Commissioners were split over which posed a bigger threat to the U.S. economy: weak hiring or entrenched high inflation.

Reuters reported that six Commissioners, including attendees without voting rights, clearly opposed the rate cut, and two of them voted against it in the actual vote. The FOMC consists of 19 members, including seven Fed governors and 12 regional Federal Reserve Bank presidents, with voting rights given to the seven governors and five regional bank presidents.

According to the minutes, "a large majority of participants" ultimately supported the rate cut. They judged that, given the recent slowdown in job creation, a rate cut could be a preemptive move that would help stabilize the labor market.

Still, there were no shortage of concerns among the Commissioners who supported the cut. Some pointed out that progress toward the Fed's 2% inflation target had stalled, and the minutes included the description that the decision was "a finely balanced judgment."

Earlier, after the December FOMC meeting, the Fed decided to cut the benchmark rate by 0.25 percentage point, from 3.75%–4.00% to 3.50%–3.75%. It was the third cut this year and the third in a row.

The decision passed on a 9–3 vote. Observers said three dissenting votes are unusual for the FOMC, which generally operates in a near-consensus manner.

The minutes also reflected caution that more economic indicators should be reviewed before taking additional steps. In practice, key indicators on employment and inflation were delayed or partly omitted because of the 43-day U.S. federal government shutdown from Oct. 1 to Nov. 12.

As a result, AP noted, Fed Commissioners at the December meeting had no choice but to rely on relatively old data rather than the latest information.

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