Federal Reserve (FED) · Iran · Kevin Warsh · Axios
Most Fed officials see rate hikes if inflation stays high, minutes show
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A "majority" of Federal Reserve officials believed the central bank could raise interest rates if inflation stays high, according to the minutes from the central bank's April 28-29 policy meeting.
Key facts
- A "majority" of Federal Reserve officials believed the central bank could raise interest rates if inflation stays high, according to the minutes from the central bank's April 28-29 policy meeting
- What they're saying: "A majority of participants highlighted … that some policy firming would likely become appropriate if inflation were to continue to run persistently above 2 percent," the minutes
- The minutes show that "many" Fed officials raised the importance of addressing cybersecurity risks, especially about AI
- The intrigue: The Fed meeting was held weeks after AI company Anthropic held its Mythos model from public release, for fear of its abilities to find and exploit security flaws
Summary
It suggests that a larger constituency than previously known is backing the possibility of higher interest rates, with the fallout from the Iran war stoking quicker price increases ahead of Kevin Warsh becoming Fed chair. The Fed held rates steady last month, though much of the disagreement was about language in the closely watched policy statement, which indicated that the next move could be a cut. Four officials on the Fed's rotating roster of voting members dissented, three of whom preferred a more "two-sided characterization" that suggested the Fed's next move could be up or down.