Policymakers left interest rates unchanged in a range of 4.25% to 4.5% last month, citing elevated uncertainty in their outlook as economic activity moderated during the first half of the year. Their statement at the time characterised the labour market as “solid” but said inflation remained “somewhat elevated.”
Most Federal Reserve officials highlighted inflation risks as outweighing concerns over the labour market at their meeting last month, as tariffs fueled a growing divide within the central bank’s rate-setting committee.
Officials acknowledged worries over higher inflation and weaker employment, but a majority of the 18 policymakers in attendance “judged the upside risk to inflation as the greater of these two risks,” according to the minutes of the Federal Open Market Committee’s July 29-30 meeting.
