FOMC Minutes Reflect Growing Concerns Over Trump’s Trade Policies

The Federal Reserve’s latest monetary policy meeting minutes, released on Wednesday, revealed that “Fed officials are factoring in the potential changes to trade and immigration policies as they prepare their economic forecasts.”

Some expressed concerns that “President-elect Donald Trump’s trade policies could make it difficult to interpret inflation readings in the coming period.” Fed policymakers also indicated a need for a cautious approach in the next quarter.

Federal Reserve policymakers now anticipate a slight slowdown in GDP growth and a slightly higher unemployment rate than previously forecast, after considering recent data releases and the potential for policy changes from the incoming U.S. administration.

The minutes added: “Information available at the time of the meeting indicated that real GDP continued to expand at a strong pace in 2024. Labor market conditions also improved since early last year, but the unemployment rate remained low. Consumer price inflation was lower than a year ago but still somewhat elevated.”

Some members of the Federal Open Market Committee expressed support for a 25-basis-point rate cut during the previous meeting, arguing that if incoming U.S. data aligns with market expectations, it would be appropriate to gradually adjust the federal funds rate toward a neutral level.