Federal Reserve policymakers got fresh reasons to hold short-term borrowing costs steady after government data signaled renewed strength in the U.S. job market, with traders now betting the U.S. central bank will wait until June to cut interest rates again and end its rate-cutting cycle there.

But minutes from their December meeting suggest that the decision was a close call — and that there is no guarantee policymakers will lower rates again anytime soon. The minutes of the central bank’s Dec.

The economy has been running hotter than expected lately, raising the possibility that the Federal Reserve will hold interest rates higher for longer, and may not even cut interest rates in 2025 as policymakers had predicted.

Federal Reserve Governor Michelle Bowman on Thursday said she supported last month's interest-rate cut as the "final step" in the U.S. central bank's monetary policy recalibration, with rising inflation risks dictating a cautious approach ahead.

Friday’s unexpectedly big increase in December nonfarm payrolls led to a diminished market-based likelihood for any rate cut by the Federal Reserve until September, based on one method of calculating expectations — and one big bank sees the risks tilting toward a rate hike.

Key Takeaways The odds of the Federal Reserve cutting its benchmark interest rate this year fell after a jobs report Friday showed hiring in December blew past expectations.Strong job growth means less pressure on the Fed to cut interest rates to save the economy and prevent layoffs.

The U.S. job market again defied an anticipated slowdown, with firms adding more than a quarter of a million jobs in the final month of 2024 and leaving Federal Reserve policymakers to puzzle over the need for more interest rate cuts in a strong economy.