Fed officials have become increasingly concerned of inflation risks stemming from the U.S.-Iran war, with many policymakers signaling that the central bank should prepare for higher interest rates.
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“A majority of participants highlighted, however, that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent,” read the minutes of the April 28-29 Federal Open Market Committee (FOMC) meeting published on Wednesday.
Split Fed Signals Shift Away From Easing Bias
Furthermore, “many” officials indicated that they would support the removal of an easing bias narrative regarding the Fed’s next move.
The April FOMC meeting marked the most divided Fed since 1992, with four officials dissenting. Stephen Miran backed a 25 bps rate cut, while Beth Hammack, Neel Kashkari, and Lorie Logan supported holding rates but opposed the easing bias in the policy statement.