WASHINGTON — Federal Reserve policymakers agreed to leave their benchmark interest rate unchanged at last month’s meeting, but sharp disagreements among officials about the future course of inflation were on full display in meeting minutes published Wednesday.
The documents, the first set of minutes released since Kevin Warsh took over as chair, showed that “many” of the 19 members participating in the rate-setting committee’s deliberations believed the Fed’s key rate — currently at 3.6% — would either stay the same or dip slightly lower by the end of the year. At the same time, “many” others anticipated the rate would actually be higher by year-end.
The central divide among officials centered on the future path of inflation. While policymakers broadly expected that easing gas prices and the fading impact of tariffs would bring inflation down, a significant number expressed concern that heavy spending on artificial intelligence infrastructure could keep prices elevated — particularly for semiconductors and other tech-related goods.
Warsh was tapped by President Donald Trump earlier this year to lead the Fed, taking over after Jerome Powell’s term as chair wrapped up in May. Trump had been a vocal critic of Powell, repeatedly arguing he was too slow to lower borrowing costs. So far, however, there is little indication that Warsh is moving toward rate cuts. Powell remains part of the Fed’s policymaking body, continuing to serve as a Fed governor with a term that runs through January 2028.
