Fed to hold interest rates steady for now over inflation concerns, minutes reveal

The Federal Reserve released its minutes from the December 17–18 meeting yesterday, which revealed that the central bank lowered interest rates in December but warned that inflation could stay high for longer than expected.

Chair Jerome Powell emphasized the need to slow rate cuts, citing uncertainty about how restrictive current rates are.

Officials raised worries about inflation and potential economic slowdowns, predicting higher employment. Inflation stands at 2.4%, with core inflation—excluding food and energy—at 2.8%. 

The central bank aims to bring inflation to 2%, but progress may be slow due to potential tariffs and policy changes by President-elect Donald Trump.

The decision to cut rates by a quarter-point last month was a close call, with some officials preferring to keep rates steady.

The Fed’s outlook has shifted, with only two rate cuts projected for 2025, down from earlier expectations of four.

Jerome Powell and team plan to closely monitor inflation and economic data, with no major changes expected until mid-year.