Fed officials were split on direction of interest rates at last meeting, minutes show
Officials were divided on whether inflation will stay elevated, while nine expected at least one rate increase this year, minutes showed.
- Federal Reserve officials were split regarding future interest rates, with policymakers entertaining scenarios in both directions, according to meeting minutes released Wednesday. The committee kept its benchmark funds rate anchored in a range between 3.5%-3.75%.
- Appointed by President Donald Trump earlier this year to replace Jerome Powell, Federal Reserve Chairman Kevin Warsh has pledged to revamp Fed operations. Warsh billed the debate as a "family fight" that ended with unanimous agreement on rates.
- The Committee approved a terse statement keeping rates unchanged while removing boilerplate language to restore "price stability." Participants noted that future policy actions would depend on incoming information, signaling preference for tighter communication.
- Many participants indicated the federal funds rate would be within or slightly below the current target range by year-end, though others assessed it could be higher. Participants remained divided on whether inflation will cool or stay elevated.
- Warsh outlined task forces to address individual topics, including communications strategy, reflecting his pledge to revamp Fed operations. Some participants welcomed the opportunity to review the Committee's communications tools and practices during the two-day session.
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