There may be 3 groups on the committee: One worried that hiring is weakening; another concerned that inflation is still too high; and a third that thinks if the job market picks up, more cuts won't be necessary.

And just in the past week, high-profile layoffs! Good luck Fed! /fini

Powell doesn't see that happening:

"One of those would be, you know, a really tight labor market. We don't see that. Another could be inflation expectations, but we really don't see that."

When it comes to inflation, Powell accepts that tariffs will keep goods prices elevated well into next year. But a key consideration is what would transform the tariff impacts on goods into a more sustained, economy-wide inflation. Rising wages and higher inflation expectations would do it, but...

More Powell: "At the same time, I think the risk of higher, more persistent inflation has declined significantly since April."

He also noted that housing inflation has cooled and non-housing services are elevated by "nonmarket" factors, which aren't really seen by consumers.

The Fed is all over the map on inflation as well. Kansas City Fed President Schmid dissented in favor of no cut because he is clearly worried inflation is still too high.

Yet Powell was somewhat dismissive about prices: "Inflation away from tariffs is actually not so far from our 2% goal." 6/x

5/x: This is the Gov. Waller view, that healthy GDP data could lead to more jobs.

Powell: “For some part of the committee, it’s time to maybe take a step back and see if whether there really are downside risks to the labor market, or see whether ... the stronger growth that we’re seeing is real.”

More Powell: "Forecasters generally, broadly have raised their economic growth forecasts for this year, actually, in some cases, quite materially.

"In the meantime, we see a labor market ... it's not clearly declining quickly and maybe just continuing to gradually cool."

Yet the new hesitancy about cutting in December seems more a response to a potential rebound in jobs rather than worries about inflation. Some on the committee think growth is improving, which could actually boost hiring.

Powell: "They're noticing stronger economic activity."

The Federal Reserve cut its key rate a second time this year out of concern that weaker hiring points to a slowing economy, which lower rates can potentially arrest.

Powell: "Labor demand has clearly softened. ... Available evidence suggests that both layoffs and hiring remain low." 2/x