US Federal Reserve officials wary of 'overly restrictive' monetary policy

The news: US Federal Reserve officials were increasingly confident of inflation being under control and wary of "overly restrictive" monetary policy damaging the economy, minutes of the December meeting show. Details of the talks have raised hopes among investors of rate cuts in 2024, although no timing was offered in the minutes of the 12-13 December meeting.

The context: The Fed hiked rates in 2023 to control inflation, and Reuters reported that policymakers at the meeting were wary of a new problem.The central bank could soon be challenged in maintaining high rates of employment, they said. While the rate hikes have dampened demand, the Fed wants to minimise the economic impact on business and employment. The unemployment rate of 3.7% is a level considered near full employment by many economists. The policymakers next meet on 30 January.

What they said: "A number of participants highlighted the uncertainty associated with how long a restrictive monetary policy stance would need to be maintained, and pointed to the downside risks to the economy that would be associated with an overly restrictive stance," the meeting minutes said.