FOMC minutes under Kevin Warsh: Rate hike pressures return



The just-released June meeting minutes – a rare source from the reticent new Chair – show the Fed's internal preparations for two scenarios:

🔹High inflation stuck: Most officials agree a rate hike is needed.
🔹Inflation falling to 2%: Hold or cut rates (but the timeline for "soon" reaching the target remains unclear).

Notably, AI infrastructure spending was suddenly flagged by the Fed as a new inflation concern due to excessive demand stimulus, ranking alongside war and tariff risks.

Adding to uncertainty, the variable of rising oil prices from the US-Iran conflict has not yet been factored into the minutes. Markets now fear the rate outlook remains highly unpredictable. The probability of a Fed rate hike in September has surged from 36% to 51%.
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