FOMC: No rate cuts unless inflation further moderates

The minutes from the most recent meeting of the Federal Reserve indicate that before hiking interest rates, officials will need to see more proof that inflation is heading downward. Though they aren’t prepared to drop rates just yet, policymakers don’t see rates rising during this economic cycle.

Several members of the FOMC made suggestions in the minutes that interest rates might be peaking. Furthermore, certain officials’ opinions highlighted some dangers related to the advancement of inflation. Moreover, some decision-makers stated that the economic prognosis was more solid than the estimates from December.

Between the December and January meetings, the FOMC’s tone and position changed, indicating that while they welcomed the progress made on inflation, they would still like to see more evidence in the context of robust activity statistics. The minutes provided more context for those conversations as well as those about QT tapering.