Fed minutes: Uncertainty ‘elevated’ as risks of higher inflation and unemployment rise

By CHRISTOPHER RUGABER WASHINGTON AP Federal Reserve executives agreed earlier this month to hold off on any interest-rate moves while they evaluated the impact of President Donald Trump s tariffs on inflation unemployment and the broader financial market Related Articles How to cut spending without cutting out small businesses A little bit of farm a little bit of suburbia That s the recipe for Agritopia Stillwater Water Street Inn s Chuck Dougherty named Lumberjack Days parade grand marshal Why wrench attacks on wealthy crypto holders are on the rise Wall Street drifts as the countdown ticks toward Nvidia s earnings document According to minutes from their May - meeting disclosed Wednesday almost all of the representatives that participate in the Fed s meetings on framework saw a peril that inflation could prove to be more persistent than expected The policymakers exhibited greater concerns about higher inflation than rising unemployment the minutes exhibited a key reason they left rates unchanged Their decision flew in the face of Trump s repeated calls to reduce borrowing costs because in his view there is NO INFLATION The central bank cut its key rate three times last year to about Federal Reserve staff economists declared during the meeting that inflation remained elevated the minutes established Trump s tariffs have created a dilemma for the Fed because the duties could both raise inflation which the Fed would typically fight with higher interest rates and slow the business activity and push up unemployment which the central bank usually tries to counter with lower rates Executives judged that downside risks to employment and upside risks to inflation had risen primarily reflecting the likely effects of tariff increases the minutes declared Since the meeting a large number of bureaucrats have underscored that the Fed may have to wait for particular time before making any further moves with interest rates Policymakers reported there was considerable uncertainty surrounding the evolution of exchange initiative and its impacts on the market system the minutes explained Taken together administrators saw the uncertainty about their economic outlooks as unusually elevated the minutes revealed