#The Fed slows the pace of rate cuts.#

The minutes from the Federal Reserve's recent December monetary policy meeting show that officials are leaning toward slowing the pace of interest rate cuts, believing that rates are near or at a level where it is appropriate to do so. This suggests that the Fed is entering a more cautious operating phase and may slow the pace of rate cuts in the future. This decision is primarily based on the fact that inflation risks remain elevated and the economic environment is complex. The minutes note that while inflation is expected to continue to move toward 2%, recent higher-than-expected inflation data, as well as the potential impact of trade and immigration policy changes, suggest that this process may take longer than previously anticipated. Some participants even noted that the disinflationary process may have stalled temporarily or pointed to potential risks. As a result, Fed policymakers believe that it is necessary to adjust monetary policy cautiously to avoid the negative consequences of overly aggressive policy adjustments, such as too-rapid rate cuts that could lead to renewed inflationary pressures. According to "Fed Whisperer" Nick Timiraos, the minutes further suggest that officials are generally willing to keep rates unchanged at the upcoming meeting at the end of this month and may continue to cut rates at a slower pace than in recent months.