Fed minutes released 🗽Key takeaways

The minutes from the Fed’s January meeting pointed to a fairly cautious outlook from the Federal Reserve. The tone could even be described as mildly hawkish — a few members suggested that, in an extreme scenario, rate hikes could still remain on the table — yet EURUSD edged slightly higher after the release.

• A vast majority of participants judged that labor market conditions had begun to show signs of stabilization and that downside risks had diminished.
• Participants generally assessed that, with appropriately calibrated monetary policy, the labor market would likely stabilize and then improve this year.
• Officials noted that economic activity appeared to be expanding at a solid pace and, in general, expected growth to remain solid in 2026.
• Several members leaned toward using more “two-sided” language when communicating the future rate path — i.e., signaling that decisions could go in either direction depending on incoming data.
• Some participants saw scope for a larger number of cuts if inflation declines as expected.
• However, most cautioned that the disinflation process could be slower than markets anticipate.
• Most participants also warned that progress toward the 2% inflation target could be slower and more uneven than generally expected, and judged the risk of inflation persistently running above target to be meaningful.
• Officials reiterated that economic activity appears to be expanding at a solid pace and broadly anticipated growth would remain solid in 2026.

Source: xStation5