New insights from the Federal Reserve (Fed) minutes reveal significant concerns about economic uncertainty and elevated inflation risks. In a March meeting, the Fed decided to keep interest rates unchanged as participants expressed growing apprehension about the economic outlook. The minutes highlight the following key points: 1. High uncertainty exists regarding government policies’ impact on the economy, prompting a cautious approach. 2. Participants anticipate inflationary effects from various factors might be more persistent than anticipated and remain tilted upwards. 3. The majority of participants believe that inflation risks are greater than previously expected while employment risks appear less significant. 4. Although the FOMC is well-positioned to await further clarity on the outlook, some members advocated for slowing the rate of balance sheet reduction due to high inflation concerns. 5. The minutes also mention potential balancing act challenges faced by the Fed if inflation remains persistent while growth and employment outlooks weaken. Additionally, participants expressed concern about a sudden shift in financial market risk perceptions potentially amplifying the impact of any negative economic shocks. A subsequent analysis noted that the market anticipates only three rate cuts this year starting in June.