Fed January Minutes Reveal Split on Future Rate Cuts and Possible Hikes

Minutes from the Federal Reserve’s Jan. 27–28, 2026 policy meeting show officials sharply divided over where to take interest rates next, with some favoring additional cuts if inflation continues to cool, others arguing to hold steady "for some time," and several wanting to keep open the option of raising rates again if price pressures persist. The Fed left rates unchanged at that meeting after cutting repeatedly in late 2025, but two governors dissented in favor of another cut, including Christopher Waller, who later warned about risks of future labor‑market deterioration. The minutes detail disagreement over how weak the job market really is and how much Trump‑era tariffs will still be passed through to consumers, even as some officials predict AI‑driven productivity gains could damp future inflation. "Most" participants worried progress back to the Fed’s 2% inflation target may be slower than hoped, citing business plans to raise prices in 2026 to offset higher costs. The release comes as newer data show 130,000 jobs added in January and CPI running at 2.4% year‑over‑year, and as President Trump’s nominee Kevin Warsh prepares to take over the Fed later this year, meaning Jerome Powell likely has only two more meetings to influence the path of rates.