The Federal Reserve’s July 28–29 meeting minutes show policymakers were divided over how aggressively to respond to persistent inflation. Most officials supported keeping the federal funds rate at 3.5%–3.75%, while several favored a 25-basis-point rate hike to prevent inflation from becoming more entrenched.
Officials said economic activity remained solid and the labor market stable, but inflation was still above the Fed’s 2% target. Many expected inflation to ease as the effects of tariffs and energy-price increases fade, though they saw risks tilted toward more persistent inflation.
The minutes also highlighted uncertainty surrounding AI-driven investment, the Middle East conflict and financial-market valuations. Several policymakers said further tightening could be necessary if inflation fails to decline.
