Fed Officials at Odds on Policy Rate Cuts

(MENAFN) The Federal Reserve has disclosed internal disagreement among policymakers regarding monetary policy direction, with certain officials advocating for a pause in rate reductions despite December's cut.

The Federal Reserve published meeting records Tuesday documenting deliberations from the Federal Open Market Committee's (FOMC) December 9-10 gathering.

Records from the session—which delivered a widely anticipated 25-basis-point reduction, bringing rates to 3.50-3.75%—exposed hesitation among several policymakers about additional monetary loosening.

Documentation revealed that while a majority of Fed policymakers backed the December rate decrease, a faction preferred maintaining the existing rate level.

According to the records, certain rate-cut supporters acknowledged their stance represented a marginal decision, with these same officials capable of endorsing rate stability instead.

The documentation noted: "Those who favored lowering the target range for the federal funds rate generally judged that such a decision was appropriate because downside risks to employment had increased in recent months and upside risks to inflation had diminished since earlier in 2025 or were little changed."

Some officials within this camp believed the rate reduction aligned with projected inflation deceleration in upcoming quarters, potentially strengthening 2026 economic performance and supporting labor market equilibrium, records showed.

The documentation further stated: "Those who preferred to keep the target range for the federal funds rate unchanged at this meeting expressed concern that progress toward the Committee's 2 percent inflation objective had stalled in 2025 or indicated that they needed to have more confidence that inflation was being brought down sustainably to the Committee's objective."

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