NATIONAL NEWS

Federal Reserve minutes: Officials saw inflation cooling but were cautious about timing of rate cuts

Jan 3, 2024, 11:10 AM

File - Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Res...

File - Federal Reserve Board Chair Jerome Powell speaks during a news conference at the Federal Reserve, Dec. 13, 2023, in Washington. On Wednesday, the Federal Reserve releases minutes from its mid-December meeting, when it kept its key short-term interest rate unchanged for a third straight time and signaled possible rate cuts in 2024. (AP Photo/Alex Brandon, File)
Credit: ASSOCIATED PRESS

(AP Photo/Alex Brandon, File)

WASHINGTON (AP) — The Federal Reserve’s policymakers concluded last month that inflationary pressures were easing and that the job market was cooling. In response, the officials chose to leave their key interest rate unchanged for the third straight time and signaled that they expected to cut rates three times in 2024.

According to the minutes of their Dec. 12-13 meeting released Wednesday, Fed officials indicated in their own interest-rate forecasts that a lower benchmark rate “would be appropriate by the end of 2024” given the steady progress toward taming inflation.

But they ”stressed the importance” of remaining vigilant and keeping rates high “until inflation was clearly moving down sustainably” toward their 2% target. And though Chair Jerome Powell suggested at a news conference after the meeting that the Fed was likely done raising rates, the minutes show that uncertainty about the economy’s outlook meant that further hikes were still possible.

The central bank began raising rates in March 2022 to combat an unexpected resurgence in consumer prices that had begun nearly a year earlier. The Fed has since raised its benchmark rate 11 times to a 22-year high of about 5.4%.

The anti-inflation campaign has made steady progress, allowing the Fed to leave its benchmark rate unchanged since July. Consumer prices were up 3.1% in November from a year earlier — down from a four-decade high 9.1% in June 2022.

Higher rates were widely expected to trigger a recession in the United States, the world’s largest economy. But the economy and the job market have proved unexpectedly resilient.

The U.S. gross domestic product — the economy’s total output of goods and services — grew at a robust 4.9% annual rate from July through September on strong consumer spending and business investment. At their meeting last month, some Fed officials noted that toward the end of 2023, the economy appeared to have slowed.

American employers added a healthy 232,000 jobs a month through November last year. The December jobs report, which the government will issue Friday, is expected to show that the economy added 155,000 jobs last month and that unemployment rose slightly to 3.8%. It would mark the 23rd straight month it’s come in below 4%, longest such streak since the 1960s.

Hiring has decelerated, and the Labor Department reported Wednesday that job openings had fallen in November to the lowest level since March 2021. The Fed sees a reduction in job openings as a painless way — compared with layoffs — to reduce pressure on companies to raise wages to attract and keep workers, which can lead to higher prices.

The combination of decelerating inflation and a sturdy economy has raised hopes that the Fed can engineer a so-called soft landing — slowing economic activity just enough to tame inflation without causing a recession.

National News

Associated Press

Sweltering temperatures persist across the US, while floodwaters inundate the Midwest

Millions of Americans sweated through a scorching weekend as temperatures soared across the U.S., while residents were rescued from floodwaters that forced evacuations across the Midwest. One person was killed during flooding in South Dakota, the governor said. From the mid-Atlantic to Maine, across the Great Lakes region, and throughout the West to California, public […]

1 hour ago

Associated Press

3 Columbia University administrators put on leave over alleged text exchange at antisemitism panel

NEW YORK (AP) — Columbia University said it has placed three administrators on leave while it investigates allegations that they exchanged unprofessional text messages while attending a panel discussion about antisemitism on campus. The university said the administrators work for its undergraduate Columbia College, which hosted the panel discussion “Jewish Life on Campus: Past, Present […]

8 hours ago

Associated Press

Man charged in shooting that critically wounded Philadelphia officer, police say

PHILADELPHIA (AP) — A 36-year-old Philadelphia man was charged Sunday with attempted murder in connection with a shooting that critically wounded a police officer after a traffic stop, police said. Ramon Rodriguez Vazquez also faces charges that include aggravated assault and home invasion, police said. The 31-year-old officer and his partner stopped a car carrying […]

9 hours ago

Associated Press

California boy, 4, who disappeared from campground found safe after 22 hours alone in wilderness

FRESNO, Calif. (AP) — A 4-year-old California boy who wandered away from a campground in the Sierra National Forest was found safe after spending 22 hours alone in the wilderness, authorities said. A search-and-rescue team of about 50 officers and volunteers set out around 11 a.m. Thursday after the child was reported missing from the […]

11 hours ago

Associated Press

One man died and five others were hospitalized in downtown St. Louis shooting

ST. LOUIS (AP) — One man is dead and five others have been wounded in a downtown St. Louis shooting, police said. Police believe women were fighting in a park when men stepped in and drew firearms, according to a statement from St. Louis police. The man who died likely was in his mid-twenties and […]

11 hours ago

Associated Press

Michigan sheriff’s deputy fatally shot pursuing a stolen vehicle in Detroit

DETROIT (AP) — A Michigan county sheriff’s deputy was fatally shot while pursing a suspected stolen vehicle in Detroit, the Oakland County sheriff’s office said Sunday. Bradley J. Reckling, who was on duty in an unmarked car, was following a 2022 Chevy Equinox Saturday evening after the vehicle was reported stolen earlier in the day […]

12 hours ago

Federal Reserve minutes: Officials saw inflation cooling but were cautious about timing of rate cuts