WASHINGTON— Federal Reserve officials signaled in minutes released Wednesday that they remain in no rush to cut rates, with policymakers increasingly worried that inflation could stay elevated longer than expected even as they also see growing downside risks to hiring and the labor market.
At the March 17-18 meeting, the FOMC held its target range at 3.50% to 3.75%, with nearly all participants backing a pause and one dissent in favor of a quarter-point cut.
A key message is the Fed is still leaning cautious on easing. The minutes said the “vast majority” of participants believed progress toward the 2% inflation goal could be slower than previously expected, with tariffs and a sharp rise in oil prices tied to Middle East conflict pushing near-term inflation risks higher. While many officials still said rate cuts would likely become appropriate over time if inflation cools as expected, some participants explicitly argued the post-meeting statement should reflect that rate hikes could also be back on the table if inflation remains stuck above target.
At the same time, the minutes underscored why analysts should not assume the Fed is singularly focused on inflation. Policymakers said job gains have remained low, most judged risks to employment are skewed to the downside, and many warned the labor market could be vulnerable to a sharper deterioration in a low-hiring environment. The committee also noted financing conditions remain “somewhat restrictive” for households and small businesses, while home purchase lending stayed subdued even as refinancing picked up.