MADRID Jan. 8 () –
The Federal Open Market Committee (FOMC) of the United States Federal Reserve (Fed) moderated its expectations for interest rate cuts at its meeting on December 18 in the face of stagnant disinflation.
“Participants indicated that the Committee was at or close to a point where it would be appropriate to slow the pace of monetary policy easing,” the minutes published this Wednesday revealed.
Despite the fact that on that day the price of money was reduced by 25 basis points to leave it in the range of 4.25% to 4.50%, the participants took note that the disinflationary pace had slowed down after registering “some” monthly readings “higher than expected.”
In addition, some went so far as to maintain that the inflation control process “could have been temporarily stopped” or, well, that it could end up doing so.
The decision on whether or not to support a reduction in the last date of 2024 was controversial, since the document shows that one member voted against the cut and others would have considered it “correct” to keep the reference rate unchanged.
Still, most participants noted that their “judgments about the appropriate political action for the meeting were balanced by the bare minimum.”
The forecasts updated in December showed an average of two rate cuts during 2025, this is two less than what was forecast in September on account of the upside risks to inflation.
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