Nick Timiraos

Heading into a new year with a new administration, policymakers project fewer cuts and somewhat more stubborn inflation.

Heading into a new year with a new administration, policymakers project fewer cuts and somewhat more stubborn inflation.

Federal Reserve officials saw risks of higher-than-expected inflation, due in part to potential tariffs by President-elect Donald Trump, when they made a "finely balanced" decision last month to lower interest rates, according to minutes of the meeting published Wednesday.

St. Louis Fed President Alberto Musalem suggests greater caution is warranted on reducing interest rates.

A rate cut from the Federal Reserve was already very unlikely this month, and the December jobs report slammed the door shut on any such prospect. Fed officials began cutting rates last September amid signs of labor market wobbles and much cooler inflation. Since then, inflation readings have been slightly firmer and the job market has motored along.

Continued from Page One from Thursday's 4.68%. That was its highest in more than a year. The silver lining for markets was that wage growth contin- ued to moderate. Average hourly earnings rose 0.3% from November to $35.69, in line with expectations but slightly slower than the prior month. That leaves intact the Fed's the- sis that the labor market isn't a source of inflationary pressure.

Musalem suggests he favors greater caution in trimming interest rates more

The central bank’s recent infusion of financial-market brawn includes Beth Hammack, who worked for three decades at Goldman Sachs.

Cleveland Fed chief, a Wall Street vet, says 'we still have an inflation problem'