Key Takeaways The Federal Reserve policy committee's annual rotation gives more votes to "hawkish" members this year, whom experts see as more inclined to keep interest rates higher.The Fed is balancing the need for rates high enough to subdue stubborn inflation while avoiding crushing the economy.

After a quarter-point cut in December, Chairman Jerome Powell said policymakers may be more cautious, since the incoming administration will create more uncertainty.

The Federal Reserve governor expects inflation to continue to decline in 2025, opening the door to interest-rate cuts.