U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1% from November's 4.2% as the labor market ended 2024 on a solid footing, reinforcing the Federal Reserve's cautious approach to interest rate cuts this year.

Federal Reserve officials at their meeting Dec. 17-18 expected to dial back the pace of interest rate cuts this year in the face of persistently elevated inflation and the threat of widespread tariffs

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.

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.

Before the strong December jobs report was released, the odds were already low for an interest rate cut in the next Federal Reserve decision on January 29.