Interest rates "at or near" peak with cuts likely ahead, Fed meeting minutes show

• The minutes did not offer further clues on when such a rate cut (or cuts) might occur. Officials appeared uncertain about how long rates might need to remain at current levels to conquer inflation.

What they're saying: "[P]articipants viewed the policy rate as likely at or near its peak for this tightening cycle," according to the minutes, with the caveat that it "will depend on how the economy evolves."

• In projections released last month alongside the Fed's policy statement that hinted the central bank was done raising rates, almost all officials indicated that interest rates would be lower by the end of this year.
• The minutes, however, show that officials noted an "unusually elevated degree of uncertainty" with those projections" and "that it was possible that the economy could evolve in a manner that would make further increases ... appropriate."

Between the lines: Those expectations came as inflation data showed notably cooler price pressures as Fed officials gathered last month.

• Fed officials saw "upside risks" to inflation as having diminished, the minutes say.
• Officials noted that inflation was still above the central bank's 2% target and "that a risk remained that progress toward price stability would stall."
• Per the minutes, inflation progress was "uneven ... with energy and core goods prices falling or changing little recently, but core services prices still increasing at an elevated pace."

Of note: "Several" officials said that supply chains had largely healed and further labor supply was unlikely so "continued progress in reducing inflation may need to come mainly from further softening in product and labor demand," according to the minutes.

• A few other officials were more optimistic that supply chains might improve further and more workers could come off the sidelines.

The intrigue: The minutes suggest uncertainty about how long officials think interest rates will need to stay at current elevated levels to bring inflation fully down to its target— a debate likely to heat up in coming months.

• The minutes say “a number of” officials noted "the downside risks to the economy" if interest rates are kept too high for too long.
• A few officials warned the Fed "potentially could face a tradeoff" between its dual mandate of maximum employment and stable prices, according to the minutes.

Go deeper: Fed leaves interest rates unchanged, signals cuts ahead next year