FOMC’s January meeting minutes reinforced Fed’s cautious stance, with policymakers emphasizing the need for “further progress on inflation” before considering any rate cuts. The officials acknowledged a “high degree of uncertainty” in the economic outlook, justifying a “careful approach” to policy adjustments.
While Fed remains confident that inflation will ease in the coming months, officials largely pointed to “upside risks to the inflation outlook”, rather than concerns over the job market.
he minutes highlighted several factors that could disrupt the disinflation process, including shifts in trade and immigration policy, geopolitical disruptions to supply chains, and stronger-than-expected household spending. These risks suggest that inflationary pressures could remain stickier than anticipated, keeping the Fed on hold for longer.
