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

By CHRISTOPHER RUGABER WASHINGTON AP Federal Reserve agents 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 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 statement According to minutes from their May - meeting published Wednesday almost all of the functionaries that participate in the Fed s meetings on strategy saw a danger that inflation could prove to be more persistent than expected The policymakers displayed greater concerns about higher inflation than rising unemployment the minutes proved 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 announced during the meeting that inflation remained elevated the minutes exhibited 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 economic 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 expected effects of tariff increases the minutes announced Since the meeting multiple personnel have underscored that the Fed may have to wait for specific time before making any further moves with interest rates Policymakers commented there was considerable uncertainty surrounding the evolution of arrangement agenda and its impacts on the economic system the minutes stated Taken together authorities saw the uncertainty about their economic outlooks as unusually elevated the minutes reported