The Federal Reserve released minutes from its December monetary policy meeting on December 30 (local time), revealing significant disagreements among officials regarding the interest rate cut decision and future policy directions.

At the December 10 policy meeting, the Federal Open Market Committee (FOMC) voted 9-3 to lower the benchmark interest rate by 25 basis points. Among its 12 members, two advocated maintaining the current rate, while one argued for a 50-basis-point reduction.

The minutes indicated that a majority of participants viewed further rate cuts as appropriate if inflation declined as projected. However, some officials contended that rates should remain unchanged post-cut to allow time for assessing delayed policy impacts on employment and economic activity, as well as to solidify confidence in inflation converging toward the 2% target.

Additionally, the consensus among attendees highlighted persistent upside risks to inflation from U.S. tariff hikes. Downside risks to employment were noted to intensify by mid-2025, with current uncertainties remaining elevated—particularly due to data delays caused by the prior federal government shutdown.

Several attending officials believed that the Federal Reserve’s stance of easing monetary policy to address downside risks in employment was appropriate. However, many officials also pointed out that the risks of persistent inflation were becoming entrenched, and further interest rate cuts under such circumstances could be misinterpreted as a weakening of policymakers’ commitment to achieving the 2% inflation target.

According to the meeting minutes, all participating officials agreed that there is no predetermined path for monetary policy at present, and future policy adjustments should be based on the latest data, economic outlook, and overall risk assessments.