U.S. Federal Reserve Chair Jerome Powell speaks during a press conference following a two-day meeting of the Federal Open Market Committee (FOMC) on interest rate policy, in Washington, D.C., U.S., January 28, 2026. Jonathan Ernst | ReutersDivided Federal Reserve officials at their January meeting indicated that further interest rate cuts should be paused for now but could resume later in the year only if inflation cooperates.While the decision to hold the central bank’s benchmark rate steady mostly was met with approval, the path ahead appeared less certain, with members conflicted between fighting inflation and supporting the labor market, according to minutes released Wednesday from the Jan. 27-28 meeting.”In considering the outlook for monetary policy, several participants commented that further downward adjustments to the target range for the federal funds rate would likely be appropriate if inflation were to decline in line with their expectations,” the meeting summary said.However, meeting participants disagreed on where policy should head, with officials debating over whether the focus should be more on fighting inflation or supporting the labor market.”Some participants commented that it would likely be appropriate to hold the policy rate steady for some time as the Committee carefully assesses incoming data, and a number of these participants judged that additional policy easing may not be warranted until there was clear indication that the progress of disinflation was firmly back on track,” the minutes stated.Moreover, some even entertained the notion that rate hikes could be on the table and wanted the post-meeting statement to more closely reflect “a two-sided description of the Committee’s future interest rate decisions.”Such a d …
