The Federal Reserve officials are split on the outlook for interest rates, primarily due to differing views on how tariffs might impact inflation.
Minutes of the Federal Open Market Committee's June meeting revealed that while some expected tariffs to lead to a one-time price increase, most officials were concerned about the potential persistent inflationary effects of tariffs.
New rate projections indicated that 10 out of 19 officials anticipated at least two rate cuts by the end of the year, with considerable uncertainty surrounding the timing and impact of tariffs on inflation.
The Fed's patient approach to rate adjustments reflects a cautious stance amid economic uncertainties, including trade policy developments and geopolitical risks.