Summary of Fed Minutes - January Meeting
Date: February 18, 2026
Key Takeaways from the Fed Minutes
The minutes from the Federal Reserve's January meeting indicate a cautious yet mildly hawkish outlook. While some members suggested that rate hikes could still be considered in extreme scenarios, the EUR/USD currency pair saw a slight increase following the release of these minutes.
Labor Market Conditions
A significant majority of Federal Reserve participants noted that labor market conditions are beginning to stabilize, with diminished downside risks. They generally believe that with appropriately calibrated monetary policy, the labor market is likely to stabilize and improve throughout the year.
Economic Activity and Growth Expectations
Officials observed that economic activity is expanding at a solid pace, and they broadly expect this growth to continue into 2026. Some members of the committee expressed a preference for using more "two-sided" language in future communications regarding the rate path, indicating that decisions could shift in either direction based on incoming data.
Inflation Outlook
While some participants see the potential for a larger number of rate cuts if inflation declines as anticipated, most members cautioned that the disinflation process may be slower than the market expects. They warned that progress towards the 2% inflation target could be uneven and slower than generally anticipated, with a meaningful risk of inflation remaining persistently above target.
Conclusion
Overall, the Federal Reserve's outlook remains cautiously optimistic, with expectations of solid economic growth in 2026, but with significant caution regarding inflation and the pace of disinflation.