Federal Reserve Meeting Minutes: More Policymakers Ready to Pave the Way for Rate Hikes

Odaily Planet Daily News: Federal Reserve officials' concerns that the Iran war could push up inflation have further intensified over the past month, with an increasing number of officials indicating the Fed should pave the way for a potential rate hike. This suggests that incoming Fed Chair Warsh will take over a policymaking team that is increasingly leaning hawkish. Additionally, most policymakers indicated at the April meeting that if inflation continues to persist above the 2% target, further policy tightening may be necessary. The minutes revealed: "To address this possibility, many participants stated a preference for removing the relevant language suggesting an easing bias in future rate decisions." These minutes, considered the "most divided in generations," further shed light on the two camp shifts as Warsh prepares to take office: a growing hawkish faction vigilant about the inflation triggered by the Iran war and opposing any discussion of rate cuts, alongside a dovish faction still leaning toward rate cuts but waning in influence. The primary driver pushing policymakers further toward the hawkish stance remains inflationary pressures, which have been further exacerbated by the war. The minutes showed that the April meeting was the second consecutive meeting where more policymakers believed rates might need to be raised if inflation remains above the target. (Jin Shi)