Fed Minutes: Rate Cuts Possible This Year, But With Reservations: The Federal Reserve’s June meeting minutes
revealed that most Federal Open Market Committee (FOMC) policymakers believe that resuming
Interest rate cuts later this year would be a “likely and appropriate” step.
However, they maintained a cautious approach, preferring to wait for more economic data before making definitive decisions.

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According to the minutes released on Wednesday, this inclination toward monetary
easing stems from members’ belief that the inflationary impact of recent tariffs will be temporary and limited.
It therefore does not warrant an immediate policy change.

Despite this leaning, all committee members unanimously voted to keep the federal funds rate
within the current range of 4.25% to 4.50%, opting for patience as they closely assess economic developments.

Opinions among members varied regarding the timing of any potential rate cuts.
Two participants supported a possible reduction as early as the July meeting,
while others felt that no rate cuts would be appropriate during 2025.

Nevertheless, the minutes affirmed the committee’s consensus that future decisions will be data-dependent,
emphasizing the Fed’s readiness to adjust its policy stance if risks emerge
that threaten its goals of price stability and sustainable growth.

The meeting discussions also pointed to continued strength in U.S. economic activity, supported by robust growth,
low unemployment and a resilient labor market, although inflation remains above the target level.

Some policymakers noted that the current interest rate may not be far from the “neutral rate.”
The level that neither stimulates nor restricts economic activity.
This suggests that the scope for rate cuts could be limited unless significant changes occur in the current economic conditions.

Fed Minutes: Rate Cuts Possible This Year, But With Reservations

Fed Minutes: Rate Cuts Possible This Year, But With Reservations

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