Federal Reserve officials signalled they are prepared to keep interest rates steady, citing persistent inflation and economic uncertainty, according to minutes from the Federal Open Market Committee’s January 28–29 meeting.
Policymakers agreed that as long as the economy remains near full employment, they would need to see further progress on inflation before adjusting the federal funds rate. The minutes noted that many officials were willing to keep rates at restrictive levels if inflation remains elevated.
The Fed left its benchmark rate unchanged at 4.25% to 4.50% at the meeting, maintaining a cautious stance after cutting rates by a percentage point in late 2024. Officials reiterated their preference to wait for inflation to move closer to the Fed’s 2% target before considering another cut.
Futures markets currently indicate at least one rate cut in 2025, with the possibility of a second. However, the minutes suggest policymakers are in no rush to ease monetary policy.
Some officials also voiced concerns over potential market disruptions from a looming debt ceiling standoff, suggesting the Fed may consider slowing its balance sheet runoff if uncertainty persists.
