The minutes from the Federal Reserve’s June meeting reveal a growing rift inside the U.S. central bank. Behind closed doors, disagreements are intensifying over when and how significantly interest rates should be adjusted. Meanwhile, political pressure — including harsh attacks from Donald Trump — is mounting.
🔹 Consensus on Hold? Only at First Glance
On June 17–18, the Fed unanimously decided to keep rates steady at 4.25–4.5%. But beyond that, the agreement quickly unraveled. The meeting minutes show deep divisions: while some officials favor a swift rate cut, others argue for caution due to potential inflation risks tied to Trump’s tariffs.
Most members leaned toward easing policy later this year, seeing tariff-driven inflation as “temporary and modest.” Others warned that inflation remains too high and the economy too resilient to justify any premature loosening.
🔹 Conflicting Timelines, No Names Given
Some Fed members expressed readiness to cut rates as soon as July, while others preferred no rate cuts at all in 2025. Though the minutes didn’t name names, Michelle Bowman and Christopher Waller have publicly said they might support a cut — provided inflation remains under control.
Others pointed out that the current rate could be near the neutral level, leaving little room for additional easing. Internal Fed projections still anticipate two cuts in 2025 and three more over the following two years.
🔹 Trump Strikes Hard with Comparisons and Criticism
Former President Donald Trump continues to attack Fed Chair Jerome Powell both online and in public speeches. His economic advisor Peter Navarro recently slammed Powell in an article for The Hill, calling him one of the worst Fed chairs in U.S. history.
Navarro noted Powell’s lack of an economics degree and likened him to Arthur Burns, the Nixon-era Fed chair blamed for 1970s stagflation. He also cited past missteps:
🔹 four rate hikes in 2018 despite low inflation,
🔹 keeping rates near zero in 2021 while inflation soared past 5%,
🔹 and waiting until March 2022 to act — triggering one of the most aggressive rate hike cycles in Fed history (11 hikes in 12 months).
Navarro also accused Powell of staying silent during Democrats’ passage of over $2 trillion in spending bills, claiming he failed to warn that it could raise inflation. Now, Navarro says, Powell risks another blunder by ignoring the pro-growth impact of Trump’s policies — tax cuts, tariffs, and deregulation — which he believes drive strong growth without overheating the economy.
🔹 Fed at a Crossroads — and Under a Microscope
Despite easing inflation uncertainty, the Fed remains cautious. The minutes affirm this position:
“Participants agreed that although uncertainty around inflation and the economic outlook had lessened, it remained appropriate to proceed cautiously in adjusting monetary policy.”
External forces further complicate the picture. Trump’s new wave of tariffs, launched in April, makes it harder for the Fed to accurately assess inflation and consumer trends. So far, inflation has remained tame — the Consumer Price Index rose just 0.1% in May — keeping public anxiety at bay.
❗ Summary:
The Fed heads into the summer with rising internal discord, political headwinds, and uncertain inflation dynamics. Powell maintains his commitment to central bank independence, but consensus among officials is no longer guaranteed. The late July policy meeting may prove pivotal — not only for the U.S. economy, but for the credibility of Powell’s leadership.
#Fed , #FederalReserve , #JeromePowell , #Inflation , #TRUMP
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