Federal Reserve officials were divided last month over the future of interest rates, with policymakers considering scenarios in either direction, according to meeting minutes released Wednesday.
In Kevin WarshAt the June 16-17 first meeting as chairman of the Federal Open Market Committee, participants saw outcomes in which inflation could slow and allow rates to fall, while others envisioned a scenario in which price increases remained high and led to increases.
At his post-meeting press conference, Warsh called the debate a “family fight” which ended with the commission unanimously vote keep the Fed’s benchmark funds rate anchored in a range between 3.5% and 3.75%, where it has remained throughout 2026.
However, the minutes do not detail any drama that occurred and lay out the divergent views of unprejudiced members on which direction the committee is leaning. The scorecard of individual member expectations, which Warsh did not participate in, narrowly leaned toward a rate increase this year, then a reduction in each of the next two years.
Asked to judge their most likely scenario, “many participants indicated that the appropriate level of the federal funds rate would be within or slightly below the current target range at the end of this year,” the minutes said.
At the same time, the paper also notes that “many other participants, however, believe that the appropriate level of the federal funds rate would be above the current target range at the end of this year.”
“Participants noted that their future policy actions would depend on the information received,” the minutes read.
The meeting summary, at 14 pages, is a bit shorter than the usual statement, although not dramatically so, following Warsh’s repeated statements that Fed officials should communicate less about their future intentions.
With that in mind, the post-meeting statement was about a third of the typical communiqué size. Officials at the meeting appeared to endorse the stricter message.
“A number of participants noted that this was an appropriate time to consider meaningful changes to the FOMC post-meeting statement,” the minutes said. “A majority of participants noted that they saw benefits in shortening the statement.”
The document also provides a general overview of what happened during the two-day session in which the Federal Open Market Committee approved the terse statement that it was keeping its benchmark interest rate unchanged and was committed to restoring “price stability” to the U.S. economy.
Notably, it removed language that indicated prior softening bias because “most participants emphasized that they preferred not to repeat the language.”
The post-meeting statement eliminated boilerplate terms to describe economic conditions and the committee’s approach to achieving its dual goals of low inflation and full employment.
The minutes come less than two months into Warsh’s term as chairman, a position to which he was appointed by the president. Donald Trump. For years. the president had criticized Warsh’s predecessor, Jerome Powell, for not pushing interest rates lower.
Since taking the reins, Warsh has pledged to revamp the Fed’s operations in a variety of ways.
At the June press conference, he presented five working groups that will address individual topics, including communication. The minutes simply mentioned the creation of the groups, noting that only “some participants said they were happy to have the opportunity to review the Committee’s communications tools and practices.”
Since then, Warsh has only made one public appearance. At a European Central Bank forum in Portugal, the central bank chief was largely circumspect about the direction he envisioned for monetary policy, consistent with his distaste for so-called forward guidance on monetary policy intentions.