Early Warning! The Federal Reserve Issues Major Announcement, A Turning Point May Be Approaching

The latest meeting minutes from the Federal Reserve discussed significant matters. It mentioned that inflation is higher than many anticipated, and combined with the uncertain impact of Trump's policies on inflation since he took office, the Fed officials decided that the pace of interest rate cuts needs to slow down in the coming months. They believe that the current interest rates are about ready to be gently lowered, as cutting too quickly might cause inflation to rise again.

However, one member of the Fed, named Waller, disagrees. On January 8, he stated that inflation will continue to decrease, steadily moving towards the 2% target, and he also supports further interest rate cuts this year. Waller feels that the U.S. economy is currently quite stable, the job market is performing well, and the impact of tariffs on inflation and monetary policy is not as significant as many think.

From the meeting minutes, most officials believe that the interest rates are now about right and should be gradually lowered, as cutting too quickly could lead to a rise in inflation again. They also mentioned that although inflation may gradually approach 2%, this process might take longer than previously expected, and the momentum against inflation may have halted.

Furthermore, many officials feel that the risks of rising inflation have increased, due to various factors, such as the recent high inflation data, potential changes in trade and immigration policies, geopolitical issues, a loose financial environment, strong household spending, rising housing prices, etc.

Regarding employment, they expect the job market to remain quite stable, but they must keep a close eye on changes in the labor market. Last month, when the Fed cut rates by 25 basis points, there were still officials who opposed it, indicating that there are differing opinions within the Fed on this issue of rate cuts.

Overall, how the Fed's policies will proceed in the future still depends on changes in data, with no fixed timetable.

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