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 business sector 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 document According to minutes from their May - meeting published Wednesday almost all of the leaders that participate in the Fed s meetings on procedures saw a pitfall that inflation could prove to be more persistent than expected The policymakers revealed greater concerns about higher inflation than rising unemployment the minutes displayed 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 reported 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 market system and push up unemployment which the central bank usually tries to counter with lower rates Functionaries judged that downside risks to employment and upside risks to inflation had risen primarily reflecting the probable effects of tariff increases the minutes revealed Since the meeting multiple agents have underscored that the Fed may have to wait for certain time before making any further moves with interest rates Policymakers declared there was considerable uncertainty surrounding the evolution of arrangement initiative and its impacts on the business sector the minutes revealed Taken together executives saw the uncertainty about their economic outlooks as unusually elevated the minutes explained