Wall Street analysts said the latest meeting minutes from the Federal Reserve reveal a somewhat divided policy committee. While most officials remain open to additional interest rate cuts if inflation continues to ease, a smaller group prefers keeping rates unchanged for now.
At Barclays, analyst Marc Giannoni noted that the minutes appear to minimize internal differences by emphasizing that most policymakers supported the December rate cut. However, he said the detailed discussion points to differing views on the future path of interest rates.
Barclays expects the Fed to pause in January and continues to project two 25-basis-point rate cuts in 2026. The bank added that the minutes suggest a likely pause early in the year, with some policymakers favoring keeping rates steady for an extended period.
Analysts at Goldman Sachs echoed that view. Economist Jan Hatzius highlighted that most policymakers believe further rate cuts will be appropriate over time, while a minority sees value in holding rates unchanged for longer.
Hatzius also pointed out that Fed officials continue to view upside risks to inflation as elevated, even as concerns about weaker employment conditions have grown.
At JPMorgan, analyst Abiel Reinhart said the minutes indicate the committee is leaning toward a pause following the December cut. He noted, however, that the meeting took place before the release of the most recent employment and inflation data.
Reinhart added that the recent increase in unemployment likely did not come as a major surprise, but further deterioration in the December jobs report could still influence policymakers toward additional easing.
Meanwhile, UBS economist Jonathan Pingle described the tone of the minutes as relatively balanced rather than hawkish. He said most policymakers appear comfortable with the idea of cutting rates and continue to expect lower borrowing costs in 2026 if inflation trends align with projections.
