Fed minutes: want to see further progress on inflation before cutting rates

Fed minutes show that the Fed wants to see ‘further progress on inflation’ before deciding to cut rates again. The Fed cited rising inflationary pressures as the reason for the last meeting to stabilise interest rates in the range of 4.25% -4.5%, the market is not expected to cut rates at the March meeting. According to the minutes of the meeting, the committee agreed that ‘the Fed had ample time to assess the changing outlook for economic activity, the labour market, and inflation’. Many economists and market strategists are concerned that tariffs and stricter immigration policies could increase inflationary pressures, potentially offsetting the positive effects of lower taxes and deregulation. The Fed has previously signalled that it is in no hurry to cut rates further as inflation remains high. Inflation has fallen from its post-epidemic highs, but remains stubbornly above the Fed's desired level. For example, the consumer price index rose 3 per cent year-on-year in January, the fastest pace in seven months and above the Fed's 2 per cent target.