The Federal Reserve has signaled a slowdown in rate cuts for 2025, citing persistent inflation and economic uncertainty. At their December meeting, officials decided on a quarter-point rate reduction to 4.3%, but the decision was contentious, with some advocating to keep rates steady.

Minutes from the meeting highlighted concerns over inflation, which rose to 2.4% in November, exceeding the Fed’s target. The possibility of policy changes, including trade and immigration adjustments, added to the uncertainty. Projections now anticipate only two rate cuts in 2025, down from earlier expectations of four.

Fed Chair Jerome Powell acknowledged that inflation risks have caused many officials to adopt a cautious stance, with borrowing costs likely to remain elevated. The next key indicator, the December Jobs Report, is set to provide further insight into the economic outlook.