- Most participants supported keeping interest rates unchanged, but several favoured an increase
- Many participants assessed higher rates would likely be necessary if inflation did not fall
- Some participants said financial conditions might not be restrictive enough to return inflation to 2% target
- Various participants said tighter financial conditions over inter-meeting period reflected strong economic growth and expectations for the Fed to adopt more restrictive stance before long
- A few participants who favoured raising rates at the meeting judged doing so would likely help forestall need for further hikes
- Chairman Warsh said six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings
- No decisions were made on number of meetings and Warsh indicated no change to the 2026 schedule
- Almost all FOMC members agreed it was appropriate to retain policy statement language affirming FOMC ‘will deliver price stability’
- Several participants said price increases over the past year were broad based, spanning various categories of goods and services
- A couple of participants said ample-reserve regime had helped maintain orderly market functioning during brief payments outage during intermeeting period
The July 28–29 FOMC minutes revealed a more hawkish debate than the rate decision suggested, and that was widely expected. While most participants supported keeping rates unchanged, several favoured an immediate hike, an many argued that higher rates could be necessary if inflation fails to decline.
Some participants questioned whether financial conditions are restrictive enough to return inflation to the Fed’s 2% target, while others argued that an earlier hike could prevent the need for even more tightening later. Several also noted that recent price increases have been broad-based across goods and services, reinforcing concerns over persistent inflation.
The minutes also revealed a discussion about reducing the number of scheduled FOMC meetings. Chairman Warsh suggested that six meetings per year, roughly every two months, could allow more information to accumulate between decisions. However, no decision was made, and the 2026 schedule remains unchanged.
Setting or altering the regular annual schedule of regular meetings is an action of the full Committee. While established by internal tradition and administrative consensus, any formal modification to the standard 8-meeting calendar rules requires the agreement of a majority of the 12 voting members of the FOMC.
Overall, the minutes point to a Fed that is increasingly focused on inflation persistence, with the door for tightening remaining open if incoming data fail to show sufficient progress toward 2%. Having said that, the minutes are rarely a market-moving event as by the time the report is released the data is stale. And more so now, after the soft NFP and CPI reports.
Below you can find the cheat sheet for intepreting the number of participants. People often confuse “some” and “several”, with the former indicating a higher number.
This article was written by Giuseppe Dellamotta at investinglive.com.