Fed Minutes: Majority Open to Rate Hike on Inflation
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Federal Reserve minutes from the April 28-29 meeting show a majority of policymakers felt "some policy firming would likely become appropriate" if inflation stays above the central bank's 2% target, marking the second straight meeting with more officials eyeing hikes than at the prior gathering
- The April meeting produced four dissents — the most since 1992 — with three Fed presidents dissenting over the statement's continued easing-bias language and Governor Stephen Miran, a Trump appointee, dissenting in favor of a rate cut
- The U.S.-Israel-led war against Iran, nearly three months old, has driven oil prices up more than 50% and broadened cost pressures beyond energy, according to the minutes and the latest consumer and wholesale inflation data
- The 2-year U.S. Treasury yield has shot from just below 3.40% on February 27, the day before strikes on Iran, to a 15-month high above 4.10% on Tuesday as bond markets price in rate hikes from the Fed and other central banks
- A Reuters poll released Tuesday found fewer than 50% of economists now project a rate cut by December, down from two-thirds a month earlier, with roughly half seeing no change and a handful pencilling in at least one rate hike
- Stephen Miran will leave the Fed on Friday to vacate a seat for incoming Chair Kevin Warsh, who will be sworn in at a White House ceremony hosted by President Trump and convene his first FOMC meeting June 16-17 with no rate change expected
Why it matters: Incoming Chair Kevin Warsh inherits a deeply divided Fed where the dovish bloc is shrinking — with bond markets already pricing in hikes (2-year yield above 4.10%) and fewer than half of economists expecting a 2026 cut. Trump's explicit demands for deep rate cuts now collide with inflation aggravated by a 50%+ oil price surge from the Iran war and a resilient labor market that doesn't justify easing.
