Fed Split Widens Over Rate Cut, Tariff Impact

The Federal Reserve's June meeting minutes show a deepening split among policymakers regarding the impact of President Trump's tariffs on inflation and the appropriate trajectory for interest rates. While most officials believe tariffs could lead to persistent inflation, some still view the effects as temporary. Only a couple of Fed members supported immediate rate cuts, while several see cuts as possibly appropriate later this year, but a growing group now advocates for no reductions in 2025. The Fed kept rates steady at 4.25%-4.5%, emphasizing a wait-and-see approach amid ongoing economic uncertainty. The labor market remains solid, but officials are increasingly concerned about the risk of entrenched inflation expectations. The risk of future dissents and a more politicized central bank has risen due to these disagreements.