Several US Federal Reserve officials supported leaving the door open to interest rate hikes, citing concerns that inflation could remain stubbornly high, minutes of the central bank’s most recent policy meeting showed on Wednesday.
The US central bank has been battling to bring inflation down to its long-term two-percent target since the pandemic, with prices remaining persistently high.
In January, the Fed chose to keep interest rates steady — after three cuts in 2025 — citing robust economic growth and the risk of inflation.
An increase in the interest rate “could be appropriate if inflation remains at above-target levels,” minutes from that meeting said.
US unemployment came in at 4.3 percent in January, remaining relatively steady as a result of drops in both labor supply and demand.
Participants saw the labor market further stabilizing under “appropriate monetary policy,” but noted that the outlook for employment remained “uncertain.”
“The vast majority of participants judged that downside risks to employment had moderated in recent months while the risk of more persistent inflation remained, and some commented that those risks had come into better balance,” the minutes said.
Analysts said the Fed’s pause on rate cuts indicated confidence in the labor market.
“The January meeting minutes underscore how most Fed officials see no urgency to act any time soon,” said Heather Long, chief economist at Navy Federal Credit Union.
Participants saw economic activity as “expanding at a solid pace,” but noted similar “high” uncertainty in the outlook for growth, the minutes said.
Source: Insider Paper
