MW Fed minutes show increased chances of interest-rate hike
By Greg Robb
Fed officials see a growing risk that inflation would stay higher for longer
Federal Reserve Chair Jerome Powell arrives for his last interest-rate policy committee press conference in April. Incoming Fed Chair Kevin Warsh is set to be sworn in on Friday.
Federal Reserve officials showed growing support at their April meeting for taking the first step toward a possible interest rate hike, according to minutes of the meeting released Wednesday.
Policymakers said that high energy prices and tariffs were continuing to put upward pressure on overall inflation.
"The vast majority of participants noted that increased risk that inflation would take longer to return to the Fed's 2% objective than they had previously expected," the minutes showed.
In April, the Fed left rates unchanged, in the range of 3.5% to 3.75%, for the third straight meeting. There were three dissents from regional Fed presidents who wanted to remove language in the statement that hinted the next move by the Fed would be a rate cut.
The minutes show that other Fed officials supported this view. "Many" Fed officials to move to language that indicated the next move could be a rate cut or a rate hike.
That's the necessary first step toward any potential hike. At his press conference in April, Federal Reserve Chair Jerome Powell said that support for the removal of neutral language was growing.
According to the minutes, "a majority" of Fed officials also stressed that some hikes would likely become appropriate if inflation were to continue to remain above 2%.
Higher fuel prices were spilling to shipping costs, airfare and fertilizer. Fed officials noted that recent price increases in the information-technology and software sectors had contributed to higher inflation.
Money markets see a growing probability of a rate hike late this year. Traders in derivative markets put a 60% chance of a rate hike by December.
Incoming Fed chair Kevin Warsh is expected to be sworn in on Friday at the White House.
Warsh has supported the quick rate cuts favored by President Donald Trump. Economists said Warsh's colleagues on the Fed are unlikely to go along with any easing until it is clear that the threat of persistent inflation clears.
On Tuesday, Trump seemed resigned to the fact that there would not be a rate cut when the Fed next meets in June.
-Greg Robb
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May 20, 2026 14:04 ET (18:04 GMT)
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