The minutes from the Federal Reserve’s latest interest rate meeting indicated that further rate cuts may become more likely if inflation declines as expected.
According to the minutes, some members believed that monetary policy easing could continue if the downward trend in inflation persisted, while the majority thought that inflation might fall at a slower pace than generally anticipated.
At its January meeting, the Federal Open Market Committee (FOMC) voted 10 to 2 to keep the policy rate unchanged at 3.50–3.75 percent. Board members Christopher Waller and Stephen Miran called for a 25 basis point rate cut.
The committee also removed the phrase “increased downside risks to employment” from the previous three statements. This change was interpreted as a partial improvement in the perception of risks to the labor market.
Data released since the January meeting indicate that growth in the US economy is accelerating, inflation is slowing, and the labor market is beginning to stabilize. According to the latest data from the US Bureau of Labor Statistics, the Consumer Price Index (CPI) saw a limited increase in January, driven by falling energy costs. The core CPI, excluding food and energy prices, rose in line with expectations.
*This is not investment advice.