Fed Signals Cautious Approach to Gradual Rate Cuts Amid Inflation Concerns

Federal Reserve officials are confident that inflation is easing and the labor market remains strong, allowing for gradual interest rate cuts, according to minutes from their November meeting. The Fed's benchmark rate was reduced by a quarter percentage point to 4.5%-4.75%, with further cuts anticipated if inflation continues to decrease towards the 2% target and employment remains stable. However, uncertainties about the neutral interest rate and potential economic impacts of President-elect Trump's policies, including tariffs, have led to cautious market expectations for future rate cuts.