Fed Officials Split Over Timing and Size of Future Rate Cuts

Minutes from the Federal Reserve’s December meeting show a sharp division among policymakers over how much further to cut interest rates and when to do it as they weigh rising unemployment against elevated inflation. The record of the meeting highlighted Chair Jerome H. Powell’s challenge in building consensus after a series of quarter-point reductions.

Officials remained uncertain about how restrictive policy already is with rates at 3.5 percent to 3.75 percent. Most officials said cuts would likely be appropriate if inflation continued to decline, arguing reductions could help avert a sharper deterioration in labor market conditions.

But several also favored holding rates steady “for some time” to better judge policy effects and gain confidence that inflation would return to 2 percent. The December vote was 9-to-3 in favor of a quarter-point cut, the third straight such move. Two officials — Austan D. Goolsbee and Jeffrey R.

Schmid — dissented in favor of standing pat, while four registered a “soft” dissent by forecasting year-end rates at the prior 3.75–4 percent range. Stephen I. Miran voted for a larger half-point cut. Those opposing further cuts cited inflation that has stayed above the Fed’s 2 percent target for nearly five years and worried that tariffs could yet re-accelerate price pressures.

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Sports, United States, Business, Federal Reserve, Interest Rates, Inflation, Unemployment