Fed minutes show officials disagree on future path of monetary policy

Alsharq Tribune-Ahmed Essam 

 U.S. monetary policymakers were divided not only on whether to cut interest rates but also on the future path of monetary policy, according to minutes of the Federal Open Market Committee (FOMC)'s Dec. 9-10 meeting released on Tuesday.

"Most participants judged that further downward adjustments to the target range for the federal funds rate would likely be appropriate if inflation declined over time as expected," said the minutes.

Moreover, many participants held that it would be appropriate for the FOMC to ease its policy stance in response to downside risks to employment.

"By contrast, several participants pointed to the risk of higher inflation becoming entrenched and suggested that lowering the policy rate further in the context of elevated inflation readings could be misinterpreted as implying diminished policymaker commitment to the 2 percent inflation objective," said the minutes.

The participants of the meeting generally judged that upside risks to inflation remained elevated and downside risks to employment had increased since the middle of 2025, the minutes read.

They observed that overall economic activity appeared to be expanding at a moderate pace and generally anticipated that the pace of economic growth would pick up in 2026, according to the minutes.

The latest data from the CME FedWatch Tool show that the Federal Reserve is seen as having an 85.1 percent probability of keeping interest rates unchanged at its January 2026 policy meeting.