FOMC minutes: Fed members split on backing more hikes

The Federal Reserve released the minutes from its May 2-3 meeting, when it raised rates by 25 bps. The minutes showed a division on support for more rate hikes. US Dollar holds onto daily gains after minutes.

The FOMC released the minutes of the May 2-3 meeting, triggering a limited reaction across financial markets. According to the document, officials were split on support for more interest rate hikes. They agreed that inflation was still “unacceptably high,” and they continue to see a “mild recession” later this year.

In May, the Fed raised the key interest rates by 25 basis points to 5.00% – 5.25%, as expected. The central bank hinted at a potential pause at the June 13-14 meeting. Since the May meeting, economic data from the US has been mixed, but far from indicating a recession.

The Consumer Price Index (CPI) slowed to 4.9% in April; however, the Core CPI rose to 5.5% from a year earlier. On Friday, the US will release April’s Core Personal Consumption Expenditure Price Index, the Fed’s preferred inflation gauge.