Recently released Fed minutes revealed an interesting picture. It appears that if inflation expectations have decreased accordingly, the central bank may implement further interest rate cuts. Looking at the minutes, it’s clear that some officials are thinking along these lines.

The interesting part is this: the majority believe that inflation may fall more slowly than forecasts suggest. In other words, the latest Fed minutes do not paint as optimistic a picture as the market had expected. The decisions made at the January meeting by the Federal Open Market Committee are still under discussion.

In short, the Fed’s actions seem to depend on inflation data. If the downward trend continues, we could see easing in monetary policy. For now, we are in a wait-and-see mode.