Diverse Opinions Seen at January FOMC Meeting, Fed Minutes Show

02:34 PM EST, 02/18/2026 (MT Newswires) -- There were clear divisions among Federal Open Market Committee members on how the path of monetary policy should evolve going forward, with some calling for recognition that the next move could possibly be upward rather than downward, minutes of the Jan. 27-28 FOMC meeting released Wednesday showed.

Several FOMC participants said that further rate reductions would be appropriate if inflation continued to slow, while some participants said that rates should be held steady "for some time" to allow for more information to be gathered. Some of those participants said that further rate cuts may not be warranted until it is clear that disinflation is progressing.

Others went further, suggesting that it is not entirely clear that further rate cuts would be necessary.

"Several participants indicated that they would have supported a two-sided description of the Committee's future interest rate decisions, reflecting the possibility that upward adjustments to the target range for the federal funds rate could be appropriate if inflation remains at above-target levels," the minutes showed. "All participants agreed that monetary policy was not on a preset course and would be informed by a wide range of incoming data, the evolving economic outlook, and the balance of risks."

Most participants said that downside risks to employment had moderated recently, while risks to inflation remained, diminishing the need for further rate cuts.

"Several participants cautioned that easing policy further in the context of elevated inflation readings could be misinterpreted as implying diminished policymaker commitment to the 2% inflation objective, perhaps making higher inflation more entrenched," the minutes showed. "By contrast, a few participants highlighted the risk that labor market conditions could deteriorate significantly while expressing confidence that inflation would continue to decline. These participants cautioned that keeping policy overly restrictive could risk further deterioration in the labor market."

At the meeting, the FOMC decided to maintain its current target range for the federal funds rate at 3.50% to 3.75% and made changes to its statement that suggest more solid economic growth, stable unemployment and less inflation concerns.

However, the FOMC's statement also acknowledged that job gains have remained low. Fed Governors Stephen Miran and Christopher Waller both dissented in favor of 25-basis-point rate reductions.

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