The US Fed released the minutes from the December FOMC meeting yesterday. The minutes carried more cautious messaging as officials decided to adopt a more measured approach to monetary policy. US inflation has been more persistent than anticipated, and along with strong consumer spending and a resilient labour market, support the cautious approach and the slower pace of rate cuts going forward. While the Fed delivered another 25bp rate cut in December, there were those in the FOMC who expressed concerns over inflation risks and favoured keeping rates steady at upcoming meetings. Fed fund futures are now pricing in a strong chance of only two rate cuts in 2025. Additionally, the minutes indicated uncertainties regarding the impact of incoming policies under Trump’s administration, which added to the cautious outlook of the Fed.