Fed Minutes Suggest Steady Rates for Now

Federal Reserve officials saw risks of higher-than-expected inflation, due in part to potential tariffs by President-elect Donald Trump, when they made a "finely balanced" decision last month to lower interest rates, according to minutes of the meeting published Wednesday.

- Nick Timiraos

The written account of the Dec. 17-18 policy meeting showed officials thought inflation was likely to continue moving down to the central bank's 2% target, but "the process could take longer than previously anticipated" due in part to possible changes to trade and immigration policy.

The "vast majority" of the 19 officials who participated in that meeting thought a quarter-point rate cut was appropriate, the minutes said. But some officials thought there was merit in keeping rates unchanged last month, and a majority had indicated the decision to cut rates was a close call, according to the minutes.

The minutes further suggest officials were broadly comfortable holding rates steady at their coming meeting at the end of this month. "Participants indicated that the committee was at or near the point at which it would be appropriate to slow the pace of policy easing," the minutes said. Officials thought under their current outlook for economic activity, the Fed could continue to cut rates at a slower pace than they had in recent months.

In projections released at last month's meeting, officials signaled greater doubt about how much further they would lower interest rates, with a majority penciling in two rate cuts this year, down from four in projections released in September.