Fed Minutes Show Division Over 2026 Rate Cuts


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Policy makers at the Federal Reserve expect to lower 
interest rates further if U.S. inflation continues to ease, according to 
minutes of the central bank's December 10 meeting released Tuesday (12/30).

   Fed officials appeared open to further easing even as three of its 12 voting 
members dissented against this month's 25-basis-point cut. This reduction, the 
third this year, lowered the  .S. lending rates to a range of 3.5% to 3.75%.

   Austan Goolsbee and Jeffrey Schmid, presidents of the Chicago and Kansas 
City Fed, respectively, dissented, arguing against front-loading cuts before 
inflation reached the 2% target. Conversely, Governor Stephen Miran -- formerly 
of the White House Council of Economic Advisers -- pushed for a larger 
50-basis-point cut to address labor risks.

   The U.S. Consumer Price Index for November, delayed by a federal shutdown 
and released December 18, showed a 2.7% year-on-year growth. The reading came 
below the 3.1% forecast, fueling hopes for further rate moderation even as 
inflation remains above the Fed's long-term goal of a 2% target.

   The Fed is trying to balance its dual mandate of keeping price growth stable 
while maximizing employment after the unemployment rate hit a four-year high of 
4.6% in November. While officials signaled a wait-and-see approach for January, 
projections point to just one rate cut throughout 2026.




(c) Copyright 2025 DTN, LLC. All rights reserved.