Federal Reserve meeting minutes reveal dissent over rate cuts: Most officials expect to maintain easing, but timing and magnitude are uncertain.

PANews December 31 News, according to Jintiao reports, based on the minutes of the Federal Open Market Committee (FOMC) meeting held on December 9-10, most Federal Reserve officials believe that further rate cuts are appropriate as long as inflation decreases over time. However, records show that there are still disagreements among officials regarding when to cut rates and the magnitude of the cuts. The minutes highlight the difficulties policymakers faced in the recent decision. The decision slightly reinforced market expectations that the Federal Reserve will keep interest rates unchanged when it meets again in January 2026. The minutes state: “Some officials supporting a rate cut at this meeting described the decision as a ‘delicate balance,’ or said they could also support maintaining the target range.” The minutes also show that some officials believe “it may be appropriate to keep the target range unchanged for a period after this meeting’s rate cut.” Although the median of the officials’ rate forecasts released after the meeting points to a 25 basis point rate cut in 2026, individual forecasts vary widely. Investors expect at least two rate cuts in the next year. Additionally, the minutes indicate significant disagreement among policymakers about whether inflation or unemployment poses a greater threat to the US economy. The minutes note: “Most participants pointed out that moving toward a more neutral policy stance would help prevent a significant deterioration in labor market conditions.” But the minutes also continue to state: “Several participants highlighted the risk of entrenched high inflation and implied that further rate cuts amid high inflation readings could be misinterpreted as a weakening of policymakers’ commitment to achieving the 2% inflation target.” Due to the government shutdown lasting throughout October and nearly half of November, officials lacked the usual level of economic data. However, policymakers noted that new data could help them in the coming weeks. Since the meeting, newly released data have done little to resolve divisions within the Federal Reserve. The November unemployment rate rose to 4.6%, the highest since 2021, while consumer price increases were below expectations. Both data points support those advocating for rate cuts. However, the third-quarter economic annualized growth rate was 4.3%, the fastest in two years, which could fuel concerns about inflation among officials opposed to a December rate cut.