Several Federal Reserve policymakers favoured raising interest rates at the central bank's June meeting, minutes released Wednesday show, revealing a growing policy divide even as the committee voted unanimously to hold borrowing costs steady.
Some members of the Federal Open Market Committee saw grounds for tightening at the June 16–17 gathering, the first chaired by incoming Chair Kevin Warsh. The Fed ultimately held the federal funds rate at 3.5%–3.75%, but the records indicate that a majority of participants would consider monetary tightening justified if elevated inflation persists. US inflation stood at 4.2% in May 2026.
The minutes cited inflationary risks from artificial intelligence, tariffs, and instability in the Middle East — a concern echoed by the International Monetary Fund's warnings of a potential inflation crisis linked to the regional conflict. Under a moderate-inflation scenario, most members expected the Fed to hold or cut rates. Governors also agreed to streamline the central bank's public communications.