The Fed cut rates by 25bps on Wednesday, as widely expected.

Stephen Miran, Trump’s man on the inside, dissented in favor of a larger reduction, as he did at last month’s policy meeting. No one joined him then and no one joined him this week either. However, Jeffrey Schmid dissented in favor of keeping rates unchanged. That’s notable.

The new statement contained a few tweaks including several allusions to the ongoing government shutdown, likely to become the longest on record next month. “Available indicators suggest that economic activity has been expanding at a moderate pace,” the Committee said. The key word there’s “available.”

The Fed described the labor market broadly as it did in the September statement with some minor adjustments to account for the missing September NFP print. “Job gains have slowed this year, and the unemployment rate has edged up but remained low through August,” the statement reads. “More recent indicators are consistent with these developments.” The inflation assessment was unchanged. Price growth’s “moved up since earlier in the year and remains somewhat elevated.”

The second paragraph was almost verbatim. “Almost” because officials had to include a tense shift, again to account for the shutdown. Uncertainty’s high, and while officials are “attentive to the risks to both sides” of the dual mandate, the policy reaction function’s at least somewhat asymmetric, where that means officials are biased to protecting the labor market and preempting job losses, even as that means cutting rates with inflation still loitering a full percentage point above target.

The forward guidance on rates was unchanged, which is to say the language was noncommittal consistent with a “meeting-by-meeting” approach, even as everyone knows and expects another cut’s in the offing at the December meeting — with more easing to come in 2026. (Schmid or no Schmid and Jerome Powell’s press conference protestations notwithstanding.)

The statement also called an end to QT from December 1. That wasn’t a foregone conclusion for today’s decision, but it may as well have been. Funding markets have exhibited some signs of stress over the past several weeks, and not just in connection with the usual September calendar events.

As noted in my October FOMC preview, bank reserves are now below the $3 trillion line, and the debate recently shifted from whether we’ve slipped below the “abundant” threshold to whether we’re now in danger of breaching “ample.”

Whether it was now or December 10, QT’s days were numbered. Markets knew that, which put the Fed in a familiar position: If you know, and everyone else knows, that you’re going to do something at the next meeting, you may as well just do it now.

From December 1, all principal payments from MBS securities will be reinvested in T-Bills. That — the rolling of MBS maturities into Bills — was also expected, but was nevertheless an open question until this afternoon. That demand will be helpful for Treasury.

There was some talk headed in of an “extra” (for lack of a more concise way to summarize what, for casual readers, can be a confusing mechanical discussion) adjustment to IORB or the SRF rate, or even ad hoc T-Bill purchases. But if you’re the Fed, you want to keep those options in your pocket until you need them. Particularly given that simply ending QT could do the trick in terms of quelling nascent funding stress. They can always institute further tweaks in December to preempt year-end liquidity strains if things don’t calm down by then.

All in all, the decision would’ve counted as a dovish cut were it not for Schmid’s dissent, which underscored a lack of consensus on the Committee beyond Miran’s hopelessly politicized perspective. Suffice to say this result wasn’t entirely ho-hum.