The minutes of the Federal Reserve's June 16-17 meeting:

The minutes confirm the underlying message that there is no urgency for easing. While the decision to keep interest rates in the 3.5-3.75% range was unanimous, the minutes reveal a real division beneath this superficial agreement. Many participants believe the appropriate funding rate at year-end will be in or slightly below the current range, while others assessed it should actually be above the current range; this means a significant portion of the committee leans towards further tightening rather than easing. The accompanying Summary of Economic Projections concretely supports this; nine of the eighteen officials project at least one rate hike this year, and the new Fed Chairman Kevin Warsh specifically avoided offering his own forecast.

Revisions to forecasts also align with what has been released. Fed officials raised their inflation forecasts for this year and next year compared to the April meeting. Reasons for this increase include new data, higher energy and input costs stemming from the Middle East conflict, and the impact of AI investments on consumer prices. Core PCE is projected to be 3.3% for 2026 and approximately 2% for 2028. GDP growth forecasts, however, were slightly lower than the previous meeting, largely reflecting new data, and set at 2.2% for 2026.

These risk factors are fully reflected in the minutes. Both officials and participants pointed to tariffs, high energy costs stemming from the Middle East conflict, and strong demand for AI investment as key factors keeping inflation high and upward. The minutes clearly state that persistent inflation remains a significant risk, in the officials' own words, given that inflation has been well above 2% for five years and that there are emerging price pressures unrelated to tariffs or energy. On the other hand, risks to employment and GDP were assessed as slightly downward; this creates a truly asymmetrical risk picture, with the risk of inflation being upward and the risk of growth being downward. This situation presents an unsettling combination for the central bank, as its two usual policy responses point in opposite directions.

This fits into the broader context of the approach Warsh has taken since taking office; he has completely removed forward guidance from the FOMC statement, and eliminating any remaining easing tendency in communication would be consistent with the same philosophy: avoiding committing to a path that the data hasn't yet justified.

For anyone tracking interest rate-sensitive assets on Gate, including cryptocurrencies, gold, and the dollar, this reinforces the dynamic that has driven markets since Warsh took office; every incoming data point now carries extreme weight because there is no forward guidance to soften the response, and today's minutes confirm that the committee's center of gravity has shifted from debating when to begin cutting rates to debating whether a rate hike before the end of the year is still on the table.