โก๏ธ Fed officials canโt agree on the next move:
At their June meeting, all Fed members agreed to keep rates steady at 4.25โ4.5%, but the unity stopped there. Some want rate cuts soon to fight slower growth, while others fear inflation could spike again because of Trumpโs new tariffs.
โก๏ธ How split is the Fed?
๐น A couple of members say a rate cut could come as early as the next meeting on July 29โ30.
๐น โSeveralโ think rates are already near neutral, so only a few cuts might be needed.
๐น A smaller group thinks no cuts at all in 2025 might be the best call.
The Fedโs official plan still shows two cuts this year and more in 2026โ27, but the internal โdot plotโ shows deep disagreements.
โก๏ธ Trump and advisers ramp up pressure:
Trump has publicly attacked Fed Chair Jerome Powell, blaming him for hurting the economy. His adviser Peter Navarro called Powell โToo Late Powell,โ accusing him of repeating old mistakes by keeping policy too tight despite weak consumer spending and low inflation (CPI up just 0.1% in May).
Navarro listed Powellโs โblundersโ:
โ Raising rates too fast in 2018, hurting Trump-era growth
โ Keeping rates near zero in 2021 as inflation spiked
โ Hiking rates aggressively later, which hit markets hard
โก๏ธ Tariffs add more uncertainty:
Trumpโs new round of tariffsโand threats of moreโmake forecasting inflation harder. Most Fed officials call the tariff-driven inflation โtemporary and modest,โ but others arenโt convinced.
โก๏ธ Powellโs stance remains cautious:
Despite political heat, Powell insists the Fed wonโt rush, saying inflation uncertainty and mixed economic data mean itโs better to move carefully. The minutes highlight this view:
โAlthough uncertainty about inflation and the outlook had decreased, it remained appropriate to take a careful approach.โ
๐ Big picture:
The Fed is now openly divided โ some pushing for quick cuts, others wanting to wait. With Trumpโs policies adding fresh pressure and inflation data still above target, the path ahead looks rocky. Investors and markets will be watching closely as the July meeting approaches.