-
Broad support to hold rates steady, with only Waller and Bowman dissenting in favor of a cut.
-
Division on tariffs: some officials believe clarity will come in the months ahead; others argue it’s not feasible to wait for complete clarity before adjusting policy.
-
Majority judged inflation risks as greater than risks to employment.
-
Doves (Waller, Bowman, allies) argue tariff-driven price increases should be ignored and are pushing for cuts as early as September.
-
Hawks highlight firmer price pressures, especially in services, crediting the Fed’s steady stance for containing tariffs.
-
Kansas City Fed’s Schmid pushed back against “inflation ex-tariffs” calculations, calling them meaningless.
-
The minutes reveal growing division within the Fed, setting up a contentious debate ahead of the September meeting.
Since the July meeting, the debate has sharpened. Doves like Waller and Bowman argue tariff-related price increases should be ignored and are pushing for cuts as early as September, backed by weaker labor data. Hawks, however, see firmer price pressures, especially in services, and credit the Fed’s steady stance for containing tariff effects. Kansas City Fed President Schmid underscored the divide by rejecting Bowman’s practice of calculating “inflation ex-tariffs,” calling it meaningless.
This article was written by Greg Michalowski at investinglive.com.
