Fed Officials Back Policy Independence, Signal Pause on Rate Cuts

Fed Officials Emphasize Policy Independence

On Wednesday, several Fed officials reiterated that the central bank must maintain independence when setting monetary policy, free from political or judicial interference. In response to questions about the ongoing investigation, officials agreed that policy decisions should be based on economic data.

• Neel Kashkari of the Minneapolis Fed supported Jerome Powell's stance
• Austan Goolsbee of the Chicago Fed stressed rates should not be politically influenced

Pause on Rate Cuts Expected

Most officials indicated that a rate cut is unlikely at the January FOMC meeting due to persistently high inflation. Kashkari noted that the economy remains strong, suggesting that rates should remain unchanged for now.

Markets widely expect the Fed to resume rate cuts no earlier than after June.