Fed minutes show officials warned rate hikes likely if inflation persists
Minutes of the Federal Reserve's April 28, 29 meeting show most participants said tightening policy would probably be warranted should inflation remain persistently above the 2 percent target. Officials pointed to the Middle East war, rising energy prices, tariffs, and an AI-driven boom as factors reshaping the interest-rate outlook and prompted many to favor dropping the easing bias from the statement. Several participants said they could support cutting rates later this year if the conflict resolves and inflation pressures dissipate. The minutes matter because they signal the Fed is prepared to raise rates again if inflation stays elevated, which would push up mortgage and business borrowing costs and influence financial markets.
Worth juxtaposing the latest Fed minutes with the subsequent inflation data Fed: “A majority of participants highlighted… that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2%” Inflation data:
Justin Wolfers116And here's how sharply the outlook for interest rates has changed: Fed funds futures have gone from anticipating a couple of rate cuts, to expecting the next move to be higher rates.
JoeCGiles4Guess they're hoping no one looks at the graph.
Ashleigh Parsons2Like no one could've seen that one coming!
Scott La Rock 🇨🇦2I think I see some persistence
