Fed minutes show majority open to rate hikes if inflation stays above 2%

Minutes of the April 28-29 FOMC meeting, published May 20, showed a majority saying some policy firming would likely become appropriate if inflation kept running persistently above 2%. Many participants wanted to drop the easing-bias language, and three dissenters objected to it. Staff estimated total PCE inflation rose to 3.5% in March, with energy prices and tariffs as key drivers.

• Target range held at 3.50%-3.75% at the April 28-29 meeting
• Hammack, Kashkari and Logan dissented against the easing-bias language
• Staff estimated total PCE inflation at 3.5% in March and core at 3.2%
• Options implied about a 30% chance of a hike by Q1 2027 at the time of the meeting