Fed minutes: Uncertainty ‘elevated’ as risks of higher inflation and unemployment rise

By CHRISTOPHER RUGABER WASHINGTON AP Federal Reserve functionaries 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 activity 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 analysis According to minutes from their May - meeting distributed Wednesday almost all of the personnel that participate in the Fed s meetings on plan saw a exposure that inflation could prove to be more persistent than expected The policymakers displayed greater concerns about higher inflation than rising unemployment the minutes demonstrated 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 explained 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 financial market and push up unemployment which the central bank usually tries to counter with lower rates Personnel judged that downside risks to employment and upside risks to inflation had risen primarily reflecting the prospective effects of tariff increases the minutes announced Since the meeting several leaders have underscored that the Fed may have to wait for certain time before making any further moves with interest rates Policymakers stated there was considerable uncertainty surrounding the evolution of commerce agenda and its impacts on the market system the minutes commented Taken together agents saw the uncertainty about their economic outlooks as unusually elevated the minutes declared