US Fed Minutes Show Officials Split on the Interest Rate Path

The Federal Reserve released the minutes of its June 16-17 meeting, revealing a Federal Open Market Committee split over the future direction of interest rates. Some officials argued that persistently high inflation could warrant a rate increase later in the year, while others favoured a cut to support growth, leaving the committee without a clear consensus and pointing to incoming inflation data as the likely deciding factor. The debate comes with the benchmark rate held at 3.50% to 3.75%, unchanged since the meeting. Price pressures remain well above target: the May Consumer Price Index rose about 4.2% from a year earlier, and the Fed's preferred gauge has also stayed elevated, driven in part by higher energy costs linked to the Middle East conflict. At the same time, the labor market has proved resilient, with the June employment report showing a modest gain of around 57,000 jobs and unemployment near 4.2%. Futures markets currently lean toward the Fed holding rates steady at its next meeting, with a meaningful minority pricing in a hike and virtually no one expecting a near-term cut.