Federal Reserve's Delicate Dance with Interest Rates: A Tense Debate

The U.S. Federal Reserve reconsidered its interest rate policy at its December meeting, cutting rates amid vigorous debate. While most officials supported the decision, six opposed. Concerns over inflation and job stability drove discussions, reflecting uncertainty during a period lacking comprehensive economic data due to a government shutdown.

The U.S. Federal Reserve decided to cut interest rates at its December meeting after an intense discussion over the economy's current risks, according to meeting minutes. Those backing the rate reduction recognized it was a closely contested decision, with some initially favoring keeping the target range steady.

Economic projections post-meeting indicated a split: six officials opposed the cut, including two voting members. Most agreed the move was necessary to stabilize the labor market. However, some argued progress toward the Fed's 2% inflation goal had paused, prompting complex dissent on maintaining rates.

The approved quarter-point rate cut lowered the Fed's interest rate to 3.5%-3.75%. This move, amid job creation slowdown and rising unemployment, sparked debate on future cuts. Limited data from the 43-day government shutdown also influenced policymakers' decisions. The Fed next meets on January 27-28.

(With inputs from agencies.)