United States Interest Rate

Almost all Fed officials judged that upside risks to the inflation outlook had increased, due to recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy, minutes from the December 2024 FOMC meeting showed. Participants projected that inflation would continue moving toward 2% but acknowledged that the process could take longer than previously expected. Several members expressed concerns that the disinflationary process might have temporarily stalled or flagged the risk of further delays. Also, officials noted that the Fed was at or near the point where it would be appropriate to slow the pace of policy easing. Many participants also suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters. The Fed announced another 25bps cut to the federal funds rate in December to the 4.25%-4.5% range and signaled just two rate cuts in 2025, totaling 50bps.