Fed members back slower pace of rate cuts, Fed's minutes show

Investing.com -- Federal Reserve policymakers were in favor of slowing the pace of rate cuts on concerns about stalling inflation, according to the minutes of the Federal Reserve’s Dec. 17-18 meeting released Wednesday.

After the December meeting, the "Committee would likely slow the pace of further adjustments to the stance of monetary policy," the minutes showed.

At the conclusion of its December meeting, the Federal Open Market Committee, or FOMC, cut its benchmark rate to a range of 4.25% to 4.5%.

The decision on whether to back a cut at the December meeting appeared to be a close call, with the minutes showing that one member voted against a cut, while the majority of participants noted that their "judgments about this meeting's appropriate policy action had been finely balanced."

The third cut in a row in December, however, was deemed a hawkish cut as the Fed members reined in the number of rate cuts for next year.

In the summary of economic projections that accompanied the decisions, Fed members expected inflation to reach the 2% target longer than previously expected and saw just two rate cuts for this year, down from four previously.

Since the Fed meeting, incoming economic data including the most recent ISM services survey, released Tuesday, which showed signs of fresh price pressures, has stoked further fears of a shallower rate cut cycle.

Fed governor Christopher Waller on Wednesday allayed some fears that rate cuts are off the table for 2025, saying that it he expects inflation to continue to slow, allowing the Fed to continue its rate-cutting journey.

Traders now expect the Fed to stay on pause until June, according to Investing.com's Fed Rate Monitor Tool.

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