Federal Reserve officials indicate a slowdown in interest rate cuts due to persistent inflation and potential policy changes. Minutes from the December meeting reveal divisions among policymakers, with some favoring unchanged rates.
Federal Reserve officials at their meeting December 17-18 expected to dial back the pace of interest rate cuts this year in the face of persistently elevated inflation and the threat of widespread tariffs and other potential policy changes. Minutes from the meeting, released after the typical three-week lag, also showed clear division among the Fed's 19 policymakers. Some expressed support for keeping the central bank's key rate unchanged, the minutes said.
And a majority of the officials said the decision to cut rates was a close call. Ultimately, the Fed choose to cut its key rate by a quarter-point to about 4.3%. One official, Cleveland Fed President Beth Hammack, dissented in favor of keeping rates unchanged.Still, there was widespread agreement that after reducing rates for three straight meetings, it was time to undertake a more deliberate approach to their key rate. Economists said the minutes strongly suggest that Fed officials will forego a rate cut at their next meeting in January. Fewer rate cuts will likely mean that borrowing costs for consumers and businesses — including for homes, cars, and credit cards — will remain elevated this year.Policymakers said that the Fed 'was at or near the point at which it would be appropriate to slow the pace of policy easing,' the minutes said. In projections released after the meeting, Fed officials said they expect just two cuts next year, down from an earlier projection of four.The minutes also showed that 'almost all' Fed policymakers see a greater risk than before that inflation could stay higher than they expect, in part because inflation has lingered in several recent readings and because of 'the likely effects of potential changes in trade and immigration policy
Federal Reserve Interest Rates Inflation Economic Policy Trade Policy
Philippines Latest News, Philippines Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Federal Reserve Signals Caution on Further Rate CutsThe Federal Reserve cut interest rates as expected but signaled a cautious approach to further reductions, citing persistent inflation. Chairman Jerome Powell emphasized the need for careful consideration of future policy moves in light of potential economic changes under the Trump administration.
Read more »
Fed signals slower rate cuts ahead amid lingering inflation concerns | Christopher RugaberWASHINGTON—Americans hoping for lower borrowing costs for homes, credit cards and cars may be disappointed after this week’s Federal Reserve meeting. The Fed’s policymakers are likely to signal fewer interest rate cuts next year than were previously expected.
Read more »
Fed Cuts Rates, Signals Slower Pace for 2025The Federal Reserve cut interest rates by a quarter-point but indicated a slower pace of reductions next year due to persistent inflation. The Fed projects only two rate cuts in 2025, down from a previous estimate of four, causing stock market declines.
Read more »
Oil Prices Fall as Fed Signals Slower Rate CutsOil prices declined on Thursday following the US Federal Reserve's indication to reduce the pace of interest rate cuts in 2025, potentially affecting fuel demand. The market reversed earlier gains triggered by falling US crude stocks and the expected 25 basis point interest rate cut.
Read more »
Fed Expected to Signal Slower Rate Cuts in 2025The Federal Reserve is poised to announce another interest rate cut, but policymakers are likely to signal a less aggressive pace in the coming year.
Read more »
US Stocks Tumble After Fed Hints at Slower Rate CutsUS stocks suffered one of their worst days of the year after the Federal Reserve signaled it may reduce interest rate cuts in 2025 compared to earlier expectations. The S&P 500, Dow Jones, and Nasdaq all experienced significant losses, driven by concerns over a less aggressive easing of monetary policy. The Fed, while continuing its rate reduction trajectory, projected only two further cuts in 2025, down from previous estimates of four. Chair Jerome Powell attributed the shift to a robust job market and rising inflation, emphasizing the need for a data-dependent approach.
Read more »