Fed Meeting Minutes: More Policymakers Ready to Pave the Way for Rate Hikes

ME News, May 21 (UTC+8), Federal Reserve officials’ concerns that the Iran war could push up inflation intensified last month, with a growing number of officials saying the Fed should pave the way for potential rate hikes. This indicates that the incoming Fed Chair Warsh will take over a decision-making team that is increasingly leaning hawkish. Additionally, most policymakers said at the April meeting that if inflation continues to persistently exceed the 2% target, further tightening may be necessary. The meeting minutes stated: "To address this possibility, many participants said they would prefer to delete language implying a dovish bias in future interest rate decisions." This Fed meeting minutes, described as "the most divided in generations," further reveals the changes in the two major camps welcoming Warsh’s arrival: a growing hawkish camp that remains vigilant about inflation triggered by the Iran war and opposes any discussion of rate cuts, and a shrinking dovish camp that still favors rate cuts but is increasingly marginalized. The main reason pushing policymakers further toward a hawkish stance remains inflationary pressures, which have been exacerbated by the war. The meeting minutes show that the April meeting was the second consecutive one where more policymakers believed that if inflation continues to exceed the target, rate hikes might be appropriate. (Source: BlockBeats)
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