Federal Reserve minutes: More policymakers are ready to pave the way for rate hikes.

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ME News reports that on May 21 (UTC+8), Federal Reserve officials' concerns about the Iran war driving up inflation intensified further last month, with a growing number of officials saying the Fed should pave the way for possible rate hikes. This indicates that incoming Fed Chair Warsh will take over a decision-making team that is increasingly leaning hawkish. Additionally, most policymakers indicated at the April meeting that if inflation continues to persistently exceed the 2% target, further tightening might be needed. The meeting minutes stated: "To address this possibility, many participants said they preferred to delete the relevant language that implied a dovish bias in future interest rate decisions." The minutes, described as "the most divided in generations," further reveal the changes in the two camps welcoming Warsh's arrival: a growing hawkish camp wary of Iran war-induced inflation and opposed to any talk of rate cuts, and a still dovish but increasingly marginalized camp that still favors rate cuts. The main driver pushing policymakers further toward the hawkish side remains inflationary pressures, which have been exacerbated by the war. The minutes show that the April meeting was the second consecutive one in which more policy officials believed that if inflation remains above target, rate hikes might be warranted. (Source: BlockBeats)
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