Federal Reserve Officials Seek ‘Further Progress’ On Inflation Before Cutting Rates

Minutes from January meeting show US central bankers back ‘careful’ approach on reducing borrowing costs

by James Politi
FT

Federal Reserve officials indicated last month that they needed to see “further progress on inflation” before any new interest rate cuts, as the US central bank kept monetary policy steady in the face of high uncertainty over the outlook.

According to minutes from the January meeting of the rate-setting Federal Open Market Committee, which was held in the week following Donald Trump’s return to the White House, a majority of US central bankers said they needed to adopt a “careful” approach to any monetary policy changes.

During the meeting, Fed officials judged that it was still appropriate to keep monetary policy at “restrictive” levels, as they worried about the growing “upside risk” to the outlook for inflation, and assessed the impact of the incoming Trump administration’s economic policies.

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