""Several participants commented that further downward adjustments to the federal funds rate would likely be appropriate if inflation were to decline in line with their expectations," according to the minutes."
""Some participants," meanwhile, said that rates should stay on hold "for some time" as the Fed assesses incoming economic data. "A number of these officials" said lowering interest rates further "may not be warranted until there was clear indication" that the inflation cooling process was back on track."
""Several" Fed officials said that they would have supported a "two-sided" description of future rate decisions, "reflecting the possibility that upward adjustments ... could be appropriate if inflation remains at above-target levels.""
""The vast majority of participants judged that labor market conditions had been showing some signs of stabilization and that downside risks to the labor market had diminished," the minutes said."
Federal Reserve officials were divided on the path for future interest rates. Some participants supported further downward adjustments to the federal funds rate if inflation declined in line with expectations. Other officials preferred holding rates steady for some time while assessing incoming economic data and said additional cuts may not be warranted until inflation cooling was clearly back on track. Several officials favored a two-sided approach that kept upward adjustments possible if inflation remained above target. The Fed paused after late-2025 cuts as labor market signs stabilized, though some warned of potential sharper unemployment if labor demand weakened.
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