Wall Street analysts assess FOMC minutes as policymakers weigh pause

Investing.com -- Wall Street analysts said the Federal Reserve’s meeting minutes point to a somewhat divided committee, with most policymakers supporting further rate cuts if inflation continues to cool, but with a few favouring holding rates steady.

Barclays analyst Marc Giannoni said the minutes “downplay the disagreements” by stressing that “most participants” backed the December cut, though the underlying detail shows “differing views about the appropriate rate path.”

Barclays expects a pause in January and maintains its forecast of two 25-basis-point cuts in 2026, adding that the minutes “hint at a likely pause in January, with some participants favoring to keep rates unchanged ‘for some time.’”

Goldman Sachs analyst Jan Hatzius also highlighted the split, noting that “most participants thought that further rate cuts would be appropriate ‘over time’… while ‘some’ participants thought it would likely be appropriate to leave the funds rate unchanged ‘for some time.’”

He added that policymakers generally judged “upside risks to inflation remained elevated,” while downside risks to employment had increased.

JPMorgan’s Abiel Reinhart said the minutes showed the committee “leaning toward pausing rates for some time following the December cut,” though he noted the meeting occurred before the latest employment and inflation data.

He said the rise in unemployment “was probably not too much of a surprise,” but further weakness in the upcoming December jobs report “could still sway them to cut.”

UBS economist Jonathan Pingle described the minutes as “not that hawkish,” saying most participants were “pretty comfortable cutting rates” and still expect to lower them in 2026 if inflation falls as projected.

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