Fed Meeting Minutes: Economic Outlook Stronger than in March, Rate Cut May Be Necessary Later This Year

May 21st — Wall Street Journal reporter Nick Timiraos, widely known as the “Fed Whisperer,” reports that Federal Reserve officials have largely moved past the issue that dominated policy debates over the last two years: whether to cut interest rates. Instead, at last month’s meeting, they’ve started seriously weighing the opposite direction: raising rates. The minutes from April’s policy meeting state: “Most participants emphasized that if inflation stays stubbornly above 2 percent, further policy tightening could become appropriate.” That April session was Jerome Powell’s final meeting as Fed chair, and the minutes underscore how the Middle East conflict has reshaped the rate-setting committee’s outlook.

May 21: Federal Reserve officials’ inflation concerns — stoked by tensions tied to the Iran conflict — have deepened recently, with a growing number of policymakers calling for the Fed to lay the groundwork for a potential interest rate hike. This signals that incoming Fed Chair Powell will take charge of a decision-making team that’s shifting increasingly hawkish. Additionally, minutes from the April meeting show further policy tightening may be necessary if inflation stays above the 2% target. The minutes noted: “To address this possibility, many participants indicated they would be inclined to remove language suggesting a bias toward accommodation in future interest rate decisions.” Described as “the most significant policy split in generations,” the April minutes also revealed two key shifts ahead of Powell’s tenure: a expanding hawkish camp wary of inflation sparked by the Iran war and opposed to any rate-cut discussions, and a shrinking dovish camp that still leans toward r

May 21: Federal Reserve meeting minutes released show that Fed officials have pretty much wrapped up the two-year FOMC debate over whether to cut interest rates—instead, they’re now seriously weighing the possibility of raising rates. The minutes noted: “Most participants emphasized that if inflation remains stubbornly above 2% on a sustained basis, further policy tightening may be necessary.” This marks Jerome Powell’s final meeting as Fed Chair, and underscores how the Middle East conflict is shifting the rate-setting committee’s outlook. Kevin Warsh is set to take the helm of the Fed after being sworn in at the White House this Friday. The Fed’s next policy meeting is slated for June 16–17.

May 21: Federal Reserve meeting minutes show participants broadly agreed that persistent high inflation, paired with uncertainty over the Middle East, may require the central bank to hold its current policy stance for longer than previously expected. A number of policymakers are leaning toward scrapping the dovish bias from the Fed’s policy statement. Most participants signaled that if inflation stays elevated above the 2% target, additional policy tightening could be necessary. Only a small handful of Fed officials believe future rate cuts would be appropriate.

May 21 – Iranian Foreign Ministry spokesman Bagaei stated late Monday local time (May 20) regarding tensions between Iran and the U.S., the security of the Strait of Hormuz, and U.S. pressure on Tehran. He emphasized that Iran will continue diplomatic negotiations while harboring “strong mistrust of the United States” — all the while firmly safeguarding its national interests. Bagaei further noted that Iran and the U.S. are engaged in continuous information sharing through a Pakistani intermediary. Tehran’s core demands include ending regional conflicts, unfreezing Iran’s overseas assets, and halting what it terms “maritime piracy” targeting Iranian shipping. Despite the U.S.’s negative track record over the past 18 months, Iran is advancing the diplomatic process with a “serious and good-faith” stance, he added. Tehran maintains this “strong and reasonable mistrust” of American intentions, per remarks reported by CCTV News.

**May 21, Local Wednesday — U.S. President Donald Trump on Wednesday indicated the U.S. could launch a more aggressive strike against Iran, though he will first evaluate whether a diplomatic agreement is feasible. The comments extend his longstanding "either-or" approach that has shaped his Iran policy since announcing a ceasefire six weeks ago.** "We have hit them very hard," Trump said in remarks Wednesday. "We may have to hit them harder—but maybe not. We will not allow Iran to acquire nuclear weapons. It’s that simple. Iran’s military is essentially destroyed: their navy is gone, their air force is gone, almost everything else too. The only question now is: will the U.S. return to totally decimate them, or will Iran sign an agreement? We’ll have to wait and see." Earlier Wednesday, Trump also noted that negotiations with Iran have entered the final phase, while warning the U.S. will conduct additional military strikes unless Iran finalizes an accord related to its nuclear program