FOMC Minutes Show Divide Among Participants

02:31 PM EDT, 08/20/2025 (MT Newswires) -- While most Federal Open Market Committee participants at the July 29-30 FOMC meeting agreed that monetary policy was well-positioned to deal with economic developments, minutes of the meeting released Wednesday showed divisions emerging among the officials.

"Participants generally pointed to risks to both sides of the Committee's dual mandate, emphasizing upside risk to inflation and downside risk to employment," the minutes showed. "A majority of participants judged the upside risk to inflation as the greater of these two risks, while several participants viewed the two risks as roughly balanced, and a couple of participants considered downside risk to employment the more salient risk."

At the meeting, the FOMC held the range of the target rate steady, but there were two dissents from the decision, with Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller preferring a 25-basis point rate reduction due to concerns that employment growth and consumer spending had already slowed and a belief that higher tariffs were not like to have a long term impact on inflation.

The participants at the meeting noted that inflation remained "somewhat elevated," while the unemployment rate remained low and that the labor department was nearing full employment.

"In considering the outlook for monetary policy, almost all participants agreed that, with the labor market still solid and current monetary policy moderately or modestly restrictive, the Committee was well positioned to respond in a timely way to potential economic developments," the minutes showed.

The meeting ended two days before government employment data showed significant downward revisions to payrolls growth in May and June that altered the picture of recent employment strength.

Likewise, the inflation impact of tariffs had become more apparent in the prices of some goods, but the participants suggested that there was significant uncertainty and that more time and clarity were needed. However, there was disagreement on how patient the FOMC could be before lowering rates.

"[S]ome participants emphasized that a great deal could be learned in coming months from incoming data, helping to inform their assessment of the balance of risks and the appropriate setting of the federal funds rate; at the same time, some noted that it would not be feasible or appropriate to wait for complete clarity on the tariffs' effects on inflation before adjusting the stance of monetary policy," the minutes showed.

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