The Federal Reserve's December FOMC meeting minutes were released, causing a wave of “big turbulence” in the market. This normally steady document surprisingly revealed internal disagreements among decision-makers, breaking the consensus on a “prolonged high-interest-rate battle.”

Although officials unanimously decided not to adjust interest rates for now, they argued fiercely on three core issues: dovish members believe that falling commodity and housing prices are driving inflation down, with the 2% target within reach, and are discussing rate cuts; hawkish members are fixated on service sector inflation and a tight labor market, warning against declaring victory too early. Doves think current real interest rates are too high and will crush the economy; hawks insist that rates are just right, and loosening too early could cause inflation to rebound. On the timing and magnitude of rate cuts, both sides held firm and reached no consensus.
When the minutes were first released, the market initially cheered the “discussion of rate cuts,” with the dollar falling and US stocks rising, everyone betting on a rate cut in March next year. But after a calm review, hawkish risk warnings quickly cooled the sentiment, and expectations for rate cuts throughout the year also receded.
Ultimately, the internal disagreements within the Federal Reserve will still depend on upcoming economic data for guidance. For the market, it’s best not to bet on a clear rate cut path anymore; following the data and closely watching officials’ statements is the way to survive now.