FOMC Minutes Reveal Fed's Growing Inflation Concerns as Warsh Floats Six-Meeting Schedule for 2027

The FOMC minutes from the July 28-29 meeting highlighted growing concerns among members over persistent inflation. Several participants noted that price pressures remained elevated even after excluding transitory factors such as tariffs and Middle East tensions. Fed Chair Kevin Warsh proposed cutting the number of annual meetings to six starting in 2027 to allow more time for data review.

Staff reports indicated that the Middle East conflict influenced markets, yet inflation compensation barely shifted despite higher oil prices. Inflation is seen declining to around 2 percent by 2028, with solid GDP growth and unemployment near its longer-run level. Risks to growth tilt downside while inflation risks skew upside.

Participants stressed that tighter policy may be needed if inflation does not ease. Warsh observed that fewer meetings would help gather more information and focus on strategic issues. The committee voted to hold rates steady, with three members dissenting in favor of a 25 basis point hike.