Minutes From Warsh's First Meeting Show Divided Fed

• A few Federal Reserve officials saw a case for raising interest rates at the June meeting, even though rates were ultimately kept on hold.
• The FOMC showed two equal camps: nine members projected at least one rate hike this year, while nine members saw no moves or rate cuts.
• Inflation risks were assessed as 'tilted to the upside,' with core and total inflation moving higher due to tariffs, supply chain disruptions, and the Strait of Hormuz closure.
• Participants noted strong demand for AI infrastructure could sustain upward pressure on tech product and electricity prices, though AI productivity gains might eventually reduce inflation over time.
• The labor market was generally seen as stable in the near term, with downside risks to maximum employment having moderated.

The Fed's June FOMC meeting minutes reveal a divided committee, with some officials seeing a case for raising interest rates despite the decision to hold. Key discussions centered on inflation risks, which were judged to be 'tilted to the upside,' and the potential impact of AI infrastructure demand and productivity gains on prices and the labor market.