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Fed Officials See Rate Hike Ahead if Inflation Stays Elevated, Minutes Show
Officials said 4 no votes showed deeper divisions as the central bank weighed whether persistent inflation would require tighter policy.
- On Wednesday, Federal Reserve minutes revealed a majority of officials concluded interest-rate increases would be necessary if inflation remains above the 2% target, following the committee's April 29 meeting where rates were held between 3.5%-3.75%.
- Officials broadly agreed that the Iran war has "significant implications" for the Federal Reserve, as soaring energy prices pushed most inflation measures above 3%, complicating the path back to the 2% target.
- The meeting featured four "no" votes—the most since 1992—as three regional presidents advocated keeping options open for increases, while many participants preferred removing language suggesting an easing bias toward future cuts.
- Traders in derivative markets put a 60% chance of a rate hike by December, while market pricing points to a higher probability of a hike by late 2026 or early 2027.
- Incoming Fed Chair Kevin Warsh is set to be sworn in on Friday, while Jerome Powell will remain on the Board of Governors despite President Donald Trump's explicit expectation that the Fed should cut rates.
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UPDATE 2-Fed minutes show more policymakers open to a rate hike
Moreover policymakers "generally judged" they would need to keep the policy rate steady for longer than previously anticipated, the minutes said, with a "vast majority" noting an increased risk that inflation would take longer to return to their 2% goal even as they "generally expected" stable labor market conditions in the near term. Indeed, while several policymakers did feel a rate cut would be appropriate once inflation eases, that was fewe…
·India
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To contemplate this possibility, many participants indicated that they would prefer to remove from the statement the mention of the trend of flexibilisation for the next decisions.
·Brazil
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Coverage Details
Total News Sources20
Leaning Left2Leaning Right4Center9Last UpdatedBias Distribution60% Center
Bias Distribution
- 60% of the sources are Center
60% Center
13%
C 60%
R 27%
Factuality
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