Fed Minutes highlight ‘diminished’ inflation risks; here are key takeaways

livemint.com:

Federal Reserve Minutes may elaborate on coming rate cut debate, here are 5 things to know "A few" Fed officials said they felt the Fed was approaching a point where the central bank may face a "tradeoff" between its dual goals of controlling inflation and maintaining high rates of employment - the sort of sacrifice policymakers have hoped to avoid in their search for a "soft landing" from the worst breakout of inflation in 40 years. "Participants pointed to the decline in inflation seen during 2023, noting the recent shift down in six-month inflation readings in particular," the minutes said, which through November were running just below the Fed's 2% target.

The minutes shed little light on when rate cuts might commence. Indeed participants also noted "an unusually elevated degree of uncertainty" about the outlook, with further interest rate increases still possible.

Also read: US stocks: All three major indices in red, S&P 500 slips 0.46%, Dow 0.4% ahead of Fed December meeting minutes But the detailed account of the session also reflected a debate underway about how to safeguard the economy while also seeing inflation continue to fall. "Most" felt that monetary policy was having its intended impact and would continue to do so by dampening household and business spending and pulling inflation back to target.

Participants "stressed...that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably toward the Committee's objective." But they also said coming decisions would be "careful and data-dependent," cognizant of developing risks to the economy and faster-than-anticipated gains on inflation. Also read: Apple's stock nightmare, erases $370