What Will Prompt the Fed to Cut Interest Rates Again? FOMC Minutes Offer Key Insights.

Core Viewpoint - The Federal Reserve is considering further interest rate cuts if inflation continues to decline, although there is division among officials regarding recent economic data [2][9]. Group 1: Interest Rate Decisions - The Federal Reserve cut interest rates for the third consecutive time during its December meeting due to concerns about a weakening labor market, despite inflation remaining above the 2% target [5]. - The minutes indicate that most Federal Open Market Committee (FOMC) members would support further rate cuts if inflation decreases as expected [3][9]. - Some FOMC members suggested maintaining the target range for interest rates unchanged for a period after the recent cut, emphasizing the need to address emerging labor market weaknesses [8]. Group 2: Economic Indicators - The latest Consumer Price Index (CPI) report indicated that inflation was at 2.7% in November, down from a previous 3% annual increase [6]. - The jobs report following the FOMC meeting revealed that unemployment rose to 4.6%, the highest level since 2021, highlighting concerns about labor market conditions [8]. - Many FOMC members noted reduced risks of tariffs driving inflation higher, while expressing concerns about potential deterioration in the labor market if interest rates remain elevated [9].