The Federal Reserve just pulled back the curtain on what happened inside the June 16-17 FOMC meeting. The Committee voted unanimously to keep the federal funds rate parked at 3.5% to 3.75%, but behind that 12-0 consensus, a real argument was brewing about what comes next.
The minutes, published on July 8, show that a faction of participants pushed for immediate rate hikes. They didn’t get their way this time.
The inflation problem that won’t quit
The 12-month Personal Consumption Expenditures rate, the Fed’s preferred inflation gauge, clocked in at 3.8% in April. That’s nearly double the 2% target. Projections suggest the May reading could jump to 4.1%. The culprits are external: energy price shocks tied to geopolitical tensions and surging demand from the artificial intelligence buildout.
The labor market, meanwhile, isn’t giving the Fed much cover to act dovish. Unemployment held steady at 4.3%, and GDP growth remained solid, particularly in AI and productivity-adjacent sectors.
