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Inflation is expected to decrease but stay above the Federal Reserve's 2% target, creating uncertainty about a potential "soft landing" for the U.S. economy. Economic growth may begin robustly in early 2026 but could decelerate later in the year due to rising tariffs and stricter immigration policies, although the likelihood of a full recession remains low.

Are we headed for a ‘soft landing’ or a recession in 2026?

Federal Reserve policymakers are divided over the December interest rate cut decision, as indicated in the meeting minutes. The Fed cut rates by 25 basis points to a range of 3.5% to 3.75%, amidst economic risks related to inflation and the labor market. Some members opposed the cut, suggesting that further data on labor and inflation would be necessary before making future decisions. The next monetary policy meeting is scheduled for January 27-28, with an 85% probability that rates will remain unchanged.

- The Federal Reserve cut interest rates by 25 basis points in December, lowering the benchmark federal funds rate to a range of 3.5% to 3.75% amid a challenging economic environment.  
- Policymakers expressed significant division on this decision, with some members advocating for a pause on rate cuts, citing stalled progress towards the 2% inflation target.  
- The next monetary policy meeting is scheduled for January 27-28, and current projections indicate an 85% likelihood of maintaining the current rate.

Fox News

Further rate cuts in question as Fed policymakers deeply divided over December cut, minutes show

Federal Reserve policymakers can’t seem to agree on when they’ll cut borrowing costs again. Most say further cuts could happen if prices keep cooling, but several officials think rates need to stay put for a while. That’s according to meeting records released Tuesday. The minutes from the Fed’s December 9-10 gathering showed ongoing disagreements among […] source:

CoinLive

Fed minutes expose cracks in policymaker unit

Federal Reserve officials are divided on future monetary policy, as shown in the minutes from the Dec. 9-10 meeting. The FOMC cut interest rates by 25 basis points, but three officials dissented. Concerns about high inflation and labor market weakness persist, with a majority suggesting further cuts may be appropriate if inflation decreases. The probability of unchanged rates next month rose to 85%. Economists expect three more rate cuts through 2026, while uncertainty looms with potential changes in leadership at the Fed.

- The minutes from the Federal Reserve's December 9-10 meeting reveal a division among officials over future monetary policy due to ongoing inflation and labor market concerns.  
- The Federal Open Market Committee implemented a third consecutive 25-basis-point interest rate cut, although some officials preferred larger or no changes, emphasizing a data-dependent approach.  
- As uncertainty looms with potential leadership changes, there is an 85% probability of maintaining current rates next month, with expectations for three additional rate cuts through 2026.

fidelity

Fed Officials Markedly Split Over Policy Path Ahead, December Meeting Minutes Show

Dollar Edges Higher on US Economic News and FOMC Minutes

Barchart Option

Dollar Edges Higher on US Economic News and FOMC Minutes

Fxstreet analyst Joshua Gibson pointed out that the Federal Reserve released the minutes of its final interest rate decision of the year, confirming that FOMC members were willing to consider further rate cuts. However, the minutes did not reveal much other significant information. The Fed's stance is tilting towards a dovish position, with most policymakers willing to explore the possibility of further rate cuts. However, the Fed's policy adjustments still depend on weak inflation data, rather than a lack of inflation data. (Jinshi)

Market Analysis: Fed Meeting Minutes Signal Cautious Dovishness

Economists expect the U.S. economy to rebound in 2026, citing Trump-era tax cuts, easing tariff effects, continued AI investment, and late-year rate cuts by the Federal Reserve, according to Reuters.

Trump Tax Cuts Lift 2026

The U.S. economy ended the third quarter of 2025 with an unexpected annualized growth rate of 4.3%, surpassing analysts' predictions. This data, released by the Bureau of Economic Analysis (BEA) at the end of December, indicates that the U.S. economy is more resilient than anticipated, despite challenges such as high interest rates and trade issues.

Point for Trump: The US economy ends 2025 with growth

Economists predict that tax changes from Trump's 2017 Tax Cuts and Jobs Act will significantly impact the U.S. economy in 2026. Key individual tax cuts include permanent lower rates, increased standard deductions, and new exemptions for tipped income and overtime pay. Business tax incentives focus on encouraging investment through full expensing of equipment and R&D costs, along with extended deductions for pass-through businesses. These changes aim to boost household income and corporate investment, although experts have mixed views on their effectiveness in driving economic growth.

Reuters

FACTBOX-Tax changes loom large for US economy in 2026

The US economy is projected to strengthen in 2026, driven by tax cuts, AI investments, and reduced tariff uncertainty. Key factors include increased consumer spending from tax refunds and business investments in AI infrastructure. However, risks such as a weakening labor market and high inflation persist, with the Federal Reserve's future interest rate policies uncertain. Economists expect a rebound in growth despite challenges, with a potential stabilization of the unemployment rate at 4.5%.

US economy to ride tax cut tailwind but faces risks

This news pertains to investment research-related information, discussing how the Federal Reserve's interest rate cuts may lead to the appreciation of the Renminbi and its impact on export competitiveness. The core viewpoint suggests that the Federal Reserve's interest rate cuts do not necessarily lead to a weaker dollar, and the appreciation of the Renminbi does not necessarily harm export competitiveness. The valuation of the Renminbi exchange rate is neutral, and stable fluctuations in the short term are the optimal option. In the long term, the exchange rate should be determined by economic fundamentals

- Recent discussions about the yuan's appreciation highlight concerns that Fed rate cuts may weaken the dollar, thereby affecting China's export competitiveness.  
- However, the narrative's logic is questionable, as a Fed rate cut does not consistently correlate with a weaker dollar, nor does yuan appreciation necessarily harm export effectiveness.  
- Future yuan fluctuations depend on internal demand-supply dynamics and external factors, with significant short-term appreciation unlikely, while policy measures may stabilize volatility and manage existing foreign exchange holdings.

Wallstreetcn

How to view the "popular narrative": Federal Reserve interest rate cuts → Renminbi appreciation → may harm export competitiveness?

The U.S. economy grew by 4.3% in Q3, attributed by President Trump to his economic policies, including tax cuts and tariffs. While Trump claims this as a success, dubbing it a "Trump Economic Golden Age," analysts express skepticism about the sustainability of this growth. The Bureau of Economic Analysis confirmed the growth, but debates continue over the long-term effects of these policies.

Dow Jones U.S. Index(.DJUS.US)

Are we headed for a ‘soft landing’ or a recession in 2026?

Further rate cuts in question as Fed policymakers deeply divided over December cut, minutes show

Fed minutes expose cracks in policymaker unit

Fed Officials Markedly Split Over Policy Path Ahead, December Meeting Minutes Show

Dollar Edges Higher on US Economic News and FOMC Minutes