Minutes from the Federal Reserve’s December 9-10 meeting revealed that most officials still see additional interest-rate cuts as appropriate if inflation continues to decline, but they remain sharply divided on timing and magnitude.

The record, released Tuesday, highlighted the tightrope policymakers walked in their latest decision, which modestly reinforced expectations that rates will likely stay unchanged at the Fed’s January meeting.

The December vote lowered the benchmark rate by a quarter percentage point to 3.5–3.75% for the third consecutive meeting, with three officials dissenting—one favoring a larger cut, two preferring no change. Rate projections for 2025 underscored the split, with some policymakers advocating for holding rates steady while others see further cuts as necessary.

A broader debate

The minutes highlighted divergent views on economic priorities, according to Bloomberg News.

Many officials focused on protecting the labor market, while others warned that reducing rates too soon could signal a weaker commitment to the 2% inflation target. Complicating the discussion, officials lacked comprehensive economic data due to the recent government shutdown, though new labor and inflation reports have since offered some guidance.

Markets responded cautiously. Federal funds futures now show only a 15% chance of a January cut, while Bitcoin, which had formed several bearish chart patterns ahead of the minutes, moved modestly, trading around $88,175 at the time of release.

With the U.S. economy posting 4.3% growth in Q3 and unemployment rising to 4.6% in November, Fed policymakers face a delicate balance in the year ahead, one that could keep crypto markets on edge as investors weigh the impact of monetary policy on risk assets.