Fed may hold off on interest rate cuts, minutes show

Several Federal Reserve officials expressed their worry over lowering interest rates too soon and letting price pressures take hold, according to minutes from the January 30-31 meeting.

The officials highlighted concerns regarding the risks associated with swiftly easing monetary policy. Only two others in the same meeting highlighted the risk of keeping rates too high for too long.

Despite rapid rate hikes over the past two years to tackle soaring inflation, rates have remained steady since July at 5.25% to 5.5%, as inflation moderated.

Fed Chair Jerome Powell hinted at no rate cuts in March, awaiting further evidence of inflation aligning with the Fed’s 2% target.

Despite expectations of rate cuts, recent economic data challenged these notions. January saw better-than-expected job additions and higher-than-forecasted inflation.

Consequently, investors now anticipate rate cuts in June rather than March.