WASHINGTON, May 20 The depth of the differences among Federal Reserve policymakers’ views on the direction of interest rates and severity of inflation will be on view on Wednesday with the release of a readout of the most divided meeting in a generation, one that also marked the…
d of Chair Jerome Powell’s leadership tenure. With Powell’s successor Kevin Warsh set to be sworn in on Friday, Wednesday’s release of the minutes of the April 28-29 meeting will add critical detail about shifts in two blocs of Fed officials waiting to greet him – a growing one wary of the inflation arising from the war in Iran and of any talk of future rate cuts, and a diminishing one still leaning toward lowering borrowing costs
Warsh, who says he relishes a “good family fight” and has himself laid out arguments in favor of lower interest rates, will become Fed chair at a White House ceremony hosted by President Donald Trump, who appointed him and who has been explicit in his demands for deep rate cuts. The minutes could show just how hard it will be to prevail in an argument for easier policy, though Trump himself has recently downplayed those expectations. The Federal Open Market Committee, the Fed’s rate-setting body, left its short-term policy rate unchanged in a range of 3.50% to 3.75% last month, but four policymakers dissented, the most since 1992.
Moreover, the dissents were mixed. One official – Governor Stephen Miran, another Trump appointee who will leave the Fed on Friday to vacate a seat for Warsh – dissented in favor, again, of a rate cut. Three others, meanwhile, dissented over the continued use of language in the accompanying policy statement that suggests the Fed still may cut rates.