Fed officials at the December meeting expressed concerns about inflation and the spillover effects of President Donald Trump’s aggressive policymaking and signaled that they would slow further easing.
The meeting summary featured at least four mentions of the impact that changes in tax and trade policies could have on the US economy.
After Donald Trump’s victory in November, he has repeatedly stated plans to impose aggressive tariffs on China, Mexico and Canada as well as on the US’s own trading partners.
However, the potential for high inflation was a major concern at the latest FOMC meeting.
All officials cited the latest stronger-than-expected inflation reading and the potential impact of potential changes in trade policy.
However, FOMC members remained committed to lowering the central bank’s benchmark lending rate to a target range of 4.25% to 4.5%.
The Fed reduced its forecast for expected cuts in 2025 to two from four in its previous estimate at the September meeting and expects two more rate cuts in 2026.
