Federal Reserve officials expect inflation to continue slowing this year, but also saw a rising risk that price pressures may remain sticky amid impacts of policies expected from the incoming Trump administration, minutes from the Dec. 17-18 monetary policy meeting showed. Fed officials incorporated “placeholder assumptions” about potential policy changes under incoming President Donald Trump. “A number” of policymakers indicated they also included placeholder assumptions in their updated economic projections.
The minutes noted, “Participants indicated that the committee was at or near the point at which it would be appropriate to slow the pace of policy easing. Many participants suggested that a variety of factors underlined the need for a careful approach to monetary policy decisions over coming quarters.” Those factors included higher inflation readings, continued strength in spending and reduced downside risks to the outlook for the labor market and economic activity.
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