Federal Reserve officials have clear disagreements over the direction of monetary policy

K-LinePoet · 2026-02-20T18:48:20+00:00

The Federal Reserve's January meeting minutes released on the 18th show that although almost all Federal Open Market Committee members supported keeping the benchmark interest rate unchanged, there was a clear divergence within the committee on the future direction of monetary policy. At the Federal Reserve's monetary policy meeting held from January 28, 10 FOMC members supported holding interest rates steady, while 2 members advocated for a 25 basis point cut.The minutes indicate that several officials believed that if inflation declines as expected, further rate cuts would be appropriate. Some officials stated that as the FOMC evaluates the latest data, maintaining interest rates for a period of time is suitable. Additionally, several members expressed support for using a "dual" description in the forward guidance to reflect that if inflation remains above the target level, interest rates could be raised.Most participants warned that inflation would need to fall back to the 2% target.

K-LinePoet

2026-02-20 18:48:20

The minutes of the Federal Reserve’s January monetary policy meeting released on the 18th show that although almost all Federal Open Market Committee members supported keeping the benchmark interest rate unchanged, there were clear disagreements within the committee about the future direction of monetary policy. At the Federal Reserve’s monetary policy meeting ending on January 28th, 10 FOMC members supported holding rates steady, while 2 members advocated for a 25 basis point cut.

The minutes indicate that several officials believe that if inflation declines as expected, further rate cuts would be appropriate. Some officials stated that as the FOMC evaluates the latest data, maintaining the current rate for a period of time is suitable. Additionally, several officials expressed support for using a “two-way” description in the forward guidance on interest rates to reflect that if inflation remains above the target level, rates could be raised.

Most officials warned that the process of bringing inflation back to the 2% target could be “slower and more uneven” than generally expected. The Federal Reserve’s next monetary policy meeting is scheduled for March 17-18. (Xinhua)

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