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FOMC minutes show some officials weighed a June rate hike
The June meeting discussion focused more on inflation and cited tariffs, supply disruptions tied to the Strait of Hormuz, and AI-related investment as drivers of price pressures.
The Federal Reserve’s minutes from its June 16 to 17 meeting showed that, despite the unanimous decision to keep the federal funds target range at 3.50% to 3.75%, some officials argued there was a case for raising rates before the Committee waited for more evidence. Housing and payroll concerns had not yet re-emerged, as the debate took place nearly two weeks before the weaker-than-expected payroll report, according to Action Forex.
Inflation drove the discussion, with participants agreeing it had increased further and remained well above the Fed’s 2.0% longer-run goal, and that risks were still tilted to the upside. Policymakers pointed to tariffs, lingering supply disruptions linked to the Strait of Hormuz, and robust AI-related investment as factors keeping price pressures persistent.
Several participants warned that strong demand for AI infrastructure would continue supporting prices for technology products and electricity. Most also judged that economic growth above potential could keep inflation elevated, while many said the labor market was not currently a source of inflationary pressures and that wage growth was broadly consistent with inflation returning to target.
The minutes also reflected Committee support for Chair Kevin Warsh’s communication strategy, including a preference to shorten the post-meeting statement and to remove language that could imply an easing bias. Finally, the minutes highlighted disagreement on the policy path, with many favoring rates ending the year within or slightly below the current range, while others believed the policy rate should be above today’s level by year-end, leaving another hike on the table.