Most Fed officials see more rate cuts ahead as long as inflation cools, minutes reveal

Core Viewpoint - Most Federal Reserve officials believe that further interest rate cuts are appropriate as long as inflation continues to decrease, as indicated in the minutes from the December 9-10 meeting [1] Group 1: Interest Rate Decisions - Policymakers reduced interest rates to a target range of 3.5% to 3.75% in a 9-3 vote, marking the most dissent since 2019, with debates focusing on inflation versus labor market concerns [1][13] - Fed Governor Stephen Miran dissented in favor of a more aggressive half-point cut, while Chicago Fed President Austan Goolsbee and Kansas City Fed President Jeff Schmid voted against the decision to keep rates unchanged [2] Group 2: Projections and Economic Indicators - Six out of 19 central bankers recommended that the benchmark rate should end 2025 at 3.75% to 4%, which is the range prior to December's cut, with the median forecast suggesting one interest rate cut for all of 2026 [3] - The unemployment rate rose to 4.6% in November, the highest since 2021, while the Consumer Price Index unexpectedly cooled to 2.7% [10] Group 3: Economic Context and Future Outlook - The recent government shutdown complicated the economic picture, with Fed Chairman Jerome Powell warning that job creation figures could be overstated by as many as 60,000 jobs monthly [9] - The US economy grew at a robust 4.3% pace, the fastest in two years, which raises concerns regarding inflation as the Federal Open Market Committee anticipates changes with four new regional presidents entering voting roles, all of whom have shown caution regarding rate cuts [11][12]