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Federal Reserve minutes on interest rates
Federal Reserve officials expressed confidence that inflation is declining and the labor market remains strong, allowing for further interest rate cuts albeit at a gradual pace, according to the minutes of the November Fed meeting released Tuesday, November 26.
The summary of the meeting included multiple statements showing that officials are comfortable with the pace of inflation, although by most measures it remains above the Fed’s 2% target.
With that in mind, and convinced that the labor market remains fairly strong, FOMC members indicated that further rate cuts were likely, although they did not specify when or to what degree.
“In discussing the outlook for monetary policy, participants anticipated that if data were to come in as expected, with inflation continuing to move sustainably down to 2% and the economy remaining near maximum employment, it would likely be appropriate to gradually move toward a more neutral stance of policy over time,” the minutes said.
The Fed’s Federal Open Market Committee voted unanimously at its November meeting to cut its benchmark interest rate by a quarter percentage point to a target range of 4.5% to 4.75%.
Markets expect the Fed to cut rates again in December, though conviction has waned amid concerns that President-elect Donald Trump’s tariff plans could stoke inflation.
The November meeting ended two days after the presidential election that sent the Republican to his second term in January. There was no mention of the election in the minutes, except for a note from committee members that stock market volatility spiked before the Nov. 5 results and declined afterward.
