Live Updates > Live Update Details
2026-05-25 10:17:38
[Fed Minutes Turn Hawkish: Pause May Be Longer, Warsh's Rate-Cutting Tendency Intensifies Conflict with Committee] (1) The minutes of the Fed's April meeting showed a significant shift in stance: previous statements emphasizing a "flexible and rapid" response based on data were replaced by new wording that "persistently high inflation and uncertainty surrounding the Iran conflict may require a longer pause than expected." (2) The inflation faced by new Chairman Warsh is not simply an energy issue. Officials pointed out that high fuel costs are being passed on to shipping, airfares, and fertilizer prices, spreading inflationary pressures to a wider range of areas and making them less likely to be considered temporary factors, providing a sustained basis for hawkish advocacy of maintaining high interest rates or even raising rates. (3) The market currently expects that if inflation does not decline, the Fed may resume raising rates at the end of 2026 or the beginning of 2027. Warsh himself favors rate cuts, but there is a potential conflict with the clearly hawkish committee; as his leadership style becomes apparent, it may exacerbate the volatility of internal communication within the FOMC.
