According to PANews on January 9, local time on Wednesday, the Federal Reserve published the minutes of the December monetary policy meeting on its official website. The minutes indicate that, considering the still high inflation risks, Federal Reserve officials have taken a new stance on interest rate cuts, deciding to slow the pace of rate reductions in the coming months. The minutes noted that participants stated that the committee believes the level of interest rates is close to, or at, a suitable moment to slow the pace of rate cuts. They believe that the pace of rate cuts may slow in the future, entering a more cautious operational phase.
A series of factors indicate that, in the current complex economic environment, Federal Reserve policymakers believe it is necessary to cautiously adjust monetary policy to avoid the negative impacts that overly aggressive policy adjustments may bring. For example, a rapid reduction in interest rates could lead to renewed inflationary pressures. Participants expect inflation to continue approaching 2%, although they point out that recently higher-than-expected inflation data, as well as potential changes in trade and immigration policies, suggest that this process may take longer than previously anticipated. Some participants noted that the anti-inflation process may have temporarily stalled or highlighted potential risks.
"Federal Reserve mouthpiece" Nick Timiraos pointed out that the Federal Reserve meeting minutes further indicate that at the upcoming meeting at the end of this month, officials are generally willing to keep interest rates unchanged. The minutes state: "Participants indicated that the committee is at or near a suitable level to slow the pace of policy easing." Officials believe that based on their current outlook for economic activity, the Federal Reserve may continue to cut interest rates at a slower pace than in recent months.