The US Federal Reserve left its key interest rate unchanged in a range of around 4.3 percent at the meeting on January 28 and 29. This temporarily halts the series of rate cuts that began last fall. According to the minutes of the meeting released on Wednesday, the monetary policymakers largely agreed that a cautious approach was necessary as long as the future development of inflation and the labor market remains uncertain.

Previously, the Fed had implemented three consecutive interest rate cuts to support the weakening economic momentum. However, following the January decision, Fed Chairman Jerome Powell made it clear that "real progress in inflation development" or a significant downturn in the labor market would be decisive before further interest rate cuts are considered again.

Since Powell made this statement, robust labor market data for January has pushed the unemployment rate to 4.0 percent. At the same time, inflation, according to the Consumer Price Index, was slightly stronger than expected, while the Fed's preferred inflation indicator, which will be released next week, is expected to show a slightly milder trend. The next Fed interest rate meeting is scheduled for March 18 and 19.

The latest meeting minutes also point to increasing risks to inflation targets. Strong consumer demand and new trade barriers are explicitly mentioned. "Business contacts in several districts signal that companies could pass on potentially higher input costs to consumer prices as a result of potential tariffs," the paper states. US President Donald Trump has intensified the trade policy tone since early February by increasing additional duties on Chinese products and considering additional tariffs on steel, aluminum, automobiles, and other goods.