FOMC Meeting Minutes Discuss Inflation and Interest Rate Policies

Summary

The January Federal Reserve meeting minutes revealed significant internal division, with officials expressing renewed concerns about inflation.Sina Finance+ 2 While rates were held at 3.5%-3.75%Zhitong, several officials discussed the possibility of a rate hike if inflation remains persistently above the 2% target.Tip Ranks+ 3 Most members warned that the path to lower inflation could be slow and uneven, advocating for patience before considering rate cuts.Sina Finance The policy focus has shifted back towards inflation risks, with the vote to hold rates passing 10-2.QQ News+ 2 Consequently, traders have pushed back expectations for the first rate cut, possibly to June.Sina Finance

Impact Analysis

So they’re basically admitting the market got way over its skis on rate cuts. The big signal isn’t just ‘patience’; it’s that they’ve officially put rate hikes back into the discussion for the first time. While a hike isn’t the base case,Dow Jones its inclusion in the minutes is a deliberate shot across the bow to manage expectations. The policy path is now a two-way street, not a one-way slide into easing.

This reinforces the ‘higher for longer’ narrative. The committee is clearly fractured,QQ News+ 2 but the center of gravity has shifted back to inflation risk because the economy remains resilient. They’re worried the last mile of this fight will be the hardest. Bottom line: the bar for a cut is very high. The trade is to stay cautious on rate-sensitive growth and long the dollar, as the risk is skewed toward hawkish surprises.