WASHINGTON — Federal Reserve policymakers are deeply split on whether to reduce interest rates again in 2025, with most officials wanting to see inflation drop more significantly before supporting additional cuts, according to meeting minutes released Wednesday.
The document from the Fed’s January 27-28 meeting revealed that the “vast majority” of the 19 committee members believe the employment market has found stability following unemployment increases in late 2025. Most policymakers also indicated the central bank’s benchmark rate has reached a neutral position that neither boosts nor hampers economic growth.
During that January session, Fed officials chose to maintain their primary interest rate at approximately 3.6%, following three reductions implemented in the final months of 2024. However, two committee members — Fed governors Stephen Miran and Christopher Waller — dissented by voting for an additional quarter-point reduction.
The meeting minutes highlighted significant disagreement among committee members, revealing three distinct viewpoints: “Several” policymakers indicated that further rate reductions would “likely be appropriate” if inflation continues its downward trend. Meanwhile, “some” officials supported maintaining current rates “for some time,” suggesting an extended pause in rate changes. Additionally, “several” committee members said they would have backed language in the post-meeting statement indicating the Fed’s next action could be either a rate cut or increase, depending on whether inflation stays above their 2% goal.
