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Fed Officials Divide Over Future Rate Cuts
(MENAFN) Minutes from the most recent gathering of the Federal Reserve revealed that certain policymakers viewed it as suitable to maintain the interest rate steady for a while after the reduction in December.
On Tuesday, the Federal Reserve published the record of discussions tied to the Federal Open Market Committee (FOMC) meeting conducted on December 9–10.
The document from that session, where the benchmark rate was lowered by 25 basis points to the 3.50–3.75% corridor—an outcome anticipated by financial markets—showed that some members were wary of additional monetary loosening.
The report emphasized that while the majority of Fed participants backed decreasing the rate during the December deliberations, a portion preferred leaving it unchanged.
It also noted that those who endorsed the reduction explained their stance was based on a fragile equilibrium, acknowledging that they might also support holding the rate steady under certain circumstances.
The minutes stated: “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.”
Furthermore, the record suggested that some policymakers believed trimming the rate aligned with the anticipated decline in inflation over the upcoming quarters, which could foster stronger economic performance in 2026 and aid in stabilizing labor market dynamics.
The minutes 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.”
On Tuesday, the Federal Reserve published the record of discussions tied to the Federal Open Market Committee (FOMC) meeting conducted on December 9–10.
The document from that session, where the benchmark rate was lowered by 25 basis points to the 3.50–3.75% corridor—an outcome anticipated by financial markets—showed that some members were wary of additional monetary loosening.
The report emphasized that while the majority of Fed participants backed decreasing the rate during the December deliberations, a portion preferred leaving it unchanged.
It also noted that those who endorsed the reduction explained their stance was based on a fragile equilibrium, acknowledging that they might also support holding the rate steady under certain circumstances.
The minutes stated: “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.”
Furthermore, the record suggested that some policymakers believed trimming the rate aligned with the anticipated decline in inflation over the upcoming quarters, which could foster stronger economic performance in 2026 and aid in stabilizing labor market dynamics.
The minutes 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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