Financial Services Association, January 9 (Editor Niu Zhanlin) On Wednesday local time, the Federal Reserve published the minutes of the December monetary policy meeting on its official website. The minutes show that considering that the risk of inflation is still high, Fed officials have taken a new position on interest rate cuts and decided to slow down the pace of interest rate cuts in the next few months.

According to the minutes of the meeting, participants said that the committee believes that the interest rate level is close to or is at a time when it is appropriate to slow down the pace of interest rate cuts. They believe that in the future, the pace of interest rate cuts may slow down and enter a more careful stage of operation.

Furthermore, a series of factors show that in the current complex economic environment, Fed policymakers believe that monetary policy needs to be carefully adjusted to avoid the negative effects that may be brought about by too aggressive policy adjustments. For example, cutting interest rates too fast may cause inflationary pressure to rise again.

Participants expect inflation to continue closer to 2%, although they pointed out that recent higher-than-expected inflation data and the impact of potential changes in trade and immigration policies suggest that this process may take longer than previously anticipated. Some participants indicated that the anti-inflation process might have temporarily stalled, or indicated possible risks.

Federal Reserve staff have taken the impact of the incoming Trump administration's policies into consideration, although the details of these policies are unclear.

Since Trump won the election in November last year, he has made it clear that he plans to impose punitive tariffs on countries such as Mexico and Canada. Furthermore, he intends to seek deregulation and mass expulsion of immigrants.

Some policymakers said they included a “seat assumption” in their latest economic forecasts, and almost all participants believed that the upward risk to the inflation outlook had increased.

In terms of employment, Federal Reserve officials expect the US job market to remain stable and the unemployment rate is low, but labor market indicators still require close attention.

The day before, the job vacancies (JOLTS) report released by the US Bureau of Labor Statistics showed that, driven by a sharp increase in the commercial services industry, US job vacancies rose to a six-month high in November, indicating that the job market is very stable.

Although the Federal Reserve cut interest rates by 25 basis points last month, some officials voted against interest rate cuts. This is extremely rare in recent years.

Some participants said that in view of the stagnant progress in reducing inflation, it is advisable to keep interest rates unchanged. Most participants felt that their judgements were in a delicate balance when deciding what policy action to take at this meeting. This shows that policymakers are quite divided over whether to adjust interest rates.

Regarding interest rate cuts, officials stressed that future policy initiatives will depend on the development of data rather than a fixed schedule.

Federal Reserve Governor Cook said on Monday that given the strong job market and ongoing inflationary pressure, policymakers can act more carefully on interest rate cuts. “Since the Federal Reserve began cutting the benchmark interest rate in September last year, the labor market has been more resilient, and inflation has been more stubborn than expected at the time.”

“Federal Reserve microphone” Nick Timiraos pointed out that the minutes of the Federal Reserve meeting further show that officials are generally willing to keep interest rates unchanged at the upcoming meeting at the end of this month. “Participants indicated that the Commission is at or near an appropriate level to slow down the pace of policy easing,” the minutes said. Officials believe that according to their current outlook on economic activity, the Federal Reserve may continue to cut interest rates at a slower pace than in recent months.