In the minutes of the Dec. 12–13 Fed meeting released Wednesday, Fed officials indicated in their interest-rate forecasts that a lower benchmark rate “would be appropriate by the end of 2024” given “clear progress” toward taming inflation, the Associated Press reports; however, they ”stressed the importance” of remaining vigilant and keeping rates high “until inflation was clearly moving down sustainably” toward their 2% target.
Despite Chair Jerome Powell’s indication at a news conference after the meeting that the Fed was likely done raising rates, the minutes show that Fed officials felt the economic outlook was uncertain enough that that further hikes were still “possible.”
Powell had also suggested at his news conference that the Fed’s policymakers discussed rate cuts during their meeting, a remark that helped ignite a stock market rally. Over the next few days, though, some other Fed officials tried to steer investors away from expecting any imminent cuts. Wednesday’s minutes provided no explicit mention about a discussion of rate cuts.
In the minutes of their meeting, the policymakers sounded optimistic about the outlook for inflation. They mentioned the end of supply chain backlogs that had caused shortages and higher prices, a drop in rents that is beginning to move through the economy, and an increase in job seekers, which makes it easier for companies to fill vacancies without having to raise pay aggressively.
