The Federal Reserve's December 9-10 meeting minutes have just been released, and they contain quite a bit of information.

Overall, most officials agree that inflation will gradually decline, paving the way for further rate cuts. But the question is—when to cut and by how much? Officials have different opinions, and there is no consensus. This directly affects market expectations; currently, most believe that by the January 2026 meeting, the Fed is likely to hold steady.

The minutes also mention an interesting detail: officials supporting this rate cut are actually quite conflicted, describing the decision as a "delicate balance," implying that maintaining the status quo is also a reasonable option. Predictions among officials vary widely; while the median suggests there could be a single 25 basis point cut next year, the actual range is broad. In comparison, investors are more aggressive, expecting at least two rate cuts in the coming year.

Another point worth noting is that officials are divided on a different issue—whether high inflation or unemployment poses a greater threat to the US economy. Most lean toward the view that adjusting to a more neutral policy stance can prevent a sharp deterioration in the labor market. However, a few officials insist that persistent high inflation carries deep-rooted risks, and cutting rates now might be seen as policymakers relaxing their pursuit of the 2% inflation target.

An additional factor is that due to the government shutdown lasting through most of October and November, officials received much less economic data than usual. However, they also mentioned that new economic data could change the situation. Therefore, upcoming data releases will significantly influence market direction.