Federal Reserve meeting minutes: A more neutral policy stance helps avoid significant deterioration in the labor market

According to Odaily, the Federal Reserve meeting minutes mentioned that when discussing risk management factors that could affect the outlook for monetary policy, participants generally believed that the upside risk to inflation remained high, while the downside risk to employment was also elevated and had increased since mid-2025. Most participants noted that moving toward a more neutral policy stance would help prevent significant deterioration in labor market conditions. Many of these participants also believed that existing evidence suggests the likelihood of tariffs causing sustained inflationary pressures has diminished. In contrast, some participants pointed out that the risk of rising inflation may be deeply rooted and argued that, in the context of persistently high inflation data, further lowering policy rates could be misinterpreted as a weakening of policymakers' commitment to the 2% inflation target.