Deep Divisions on Policy Seen at June 16-17 FOMC Meeting, Fed Minutes Show

There was widespread disagreement among Federal Open Market Committee participants at the June 16-17 meeting, minutes of that meeting released Wednesday showed. At the meeting, the FOMC held rates steady, as expected, but drastically reduced the size of its statement to remove forward guidance. The updated Summary of Economic Projections shows a shift toward rate hikes due to sharply higher inflation expectations. All participants support leaving the policy rate unchanged at the meeting due to elevated inflation, solid expansion of economic activity and stable labor market conditions. "Participants generally assessed that information received over the intermeeting period suggested that upside risks to price stability remained elevated while downside risks to achieving maximum employment had moderated a bit," the minutes showed. "A few participants commented that, in light of these developments, there was a case for raising the target range for the federal funds rate, but those participants indicated that they supported maintaining the current target range at this meeting." However, there were disagreements about the future path of policy and what could trigger certain.