According to the minutes from the November gathering, Federal Reserve authorities are optimistic about the reduction in inflation and the robustness of the employment market. This, they believe, sets the stage for more gradual interest rate reductions.

The meeting summary included various remarks suggesting that officials are satisfied with the current inflation rate, despite it being above the Fed’s target of 2% by most standards.

Keeping this in mind, and with the belief that the job market remains stable, members of the Federal Open Market Committee hinted at probable further rate cuts, although the specifics of when and to what extent were not provided.

“Participants anticipated that if the data unfolded as anticipated, with inflation steadily decreasing to 2 percent and the economy remaining near maximum employment, it would likely be suitable to gradually transition towards a more neutral policy stance over time,” the minutes noted.

The FOMC unanimously decided to decrease its benchmark borrowing rate by a quarter of a percentage point, bringing it to a target range of 4.5%-4.75%. The market predicts the Fed could cut again in December, although confidence in this has declined due to fears that President-elect Donald Trump’s tariff plans could cause a spike in inflation.

The meeting concluded two days after the divisive presidential election campaign, which saw the Republican candidate win and prepare to start his second term in January. The minutes made no reference to the election, except for a staff note that stock market volatility increased before the November 5 results and decreased afterward. No discussions were held about the potential economic impacts of Trump’s plans, including tax cuts and aggressive deregulation.

However, the members acknowledged a general level of uncertainty about how conditions are developing. They also expressed doubts about where the rate cuts would need to stop before the Fed reached a “neutral” interest rate that neither promotes nor inhibits growth.

“Many participants noted that uncertainties about the neutral interest rate level complicated the assessment of the restrictiveness of monetary policy, leading them to believe that it would be appropriate to gradually reduce policy restraint,” according to the minutes.

Conflicting signals about inflation and uncertainty about Trump’s policies have led traders to revise their expectations for future interest rate cuts. The market now sees less than a 60% chance of a rate cut in December, with just three-quarters of a percentage point expected in reductions by the end of 2025.

Much of the meeting seemed to focus on recounting progress on inflation and a generally stable economic outlook.

Recent statements by policymakers suggest they are confident that current inflation measures are being driven by increases in shelter costs, which are expected to slow as rent rises ease and are reflected in the data.

“Nearly all participants agreed that despite monthly fluctuations, incoming data generally remained consistent with inflation returning sustainably to 2 percent,” the document stated. “Participants cited various factors likely to continue putting downward pressure on inflation, including diminishing business pricing power, the Committee’s still-restrictive monetary policy stance, and well-anchored longer-term inflation expectations,” it added.

There had been concerns expressed by policymakers about the labor market, as nonfarm payrolls only increased by 12,000 in October. However, this modest gain has mainly been attributed to storms in the Southeast and labor strikes.

Officials stated that the labor market’s condition is generally sound.

“Participants generally noted that there was no evidence of a rapid decline in labor market conditions, with layoffs remaining low,” the minutes indicated.