Investing.com -- Federal Reserve policymakers were in favor of a wait-and-see approach on further rates cuts, citing the need for further evidence that inflation is slowing at a time when the persistent strength in the economy and fears of the inflationary-impact of tariffs threaten to undo the central bank's progress toward the 2% inflation goal, according to the minutes of Federal Reserve's January meeting released Wednesday.
"Many participants, however, emphasized that additional evidence of continued disinflation would be needed to support the view that inflation was returning sustainably to 2 percent," the fed minutes showed.
At the conclusion of its January meeting, the Federal Open Market Committee, or FOMC, kept its benchmark rate to a range of 4.25% to 4.5%.
Since the, Fed meeting, incoming economic data, testimony from Fed chair Jerome Powell and a slew of economic data including hotter jobs and inflation data have fueled expectations for a prolonged for Fed pause.
Fed members echoed the sentiment for a prolonged pause, with participants observing that "the Committee was well positioned to take time to assess the evolving outlook for economic activity, the labor market, and inflation, with the vast majority pointing to a still-restrictive policy stance."
Earlier this month, Powell told the Senate Banking committee that there wasn't a need for the Fed to "to be in a hurry" to lower interest rates as monetary policy is already less restrictive and the economy remains strong.
“With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to adjust our policy stance,” Powell said.
Following minutes, economists continue to expect the Fed to remain on pause.
"It’s clear from the minutes that rate cuts are not happening anytime soon, and the Fed will likely wait for some of the dust to settle on tariffs before providing better forward guidance," Oxford Economics said in a note. "The minutes support the recent changes to our baseline forecast that the Fed will be cautious this year, cutting rates only once in December," it added.