Officials opted to keep the benchmark rate steady at 4.25% to 4.50%, though the record shows a widening rift inside the Fed as the U.S. economy struggles with tariffs, inflation, and weakening jobs data.
While most policymakers agreed that holding rates unchanged was the appropriate course, two senior members, Michelle Bowman and Christopher Waller, pushed for a cut, citing signs of a cooling labor market. Their concerns were quickly validated when the Labor Department released weaker-than-expected July jobs data, revealing not only a slowdown in hiring but also downward revisions that erased more than 250,000 positions from previous months.
Adding political drama to the economic backdrop, President Donald Trump reacted furiously to the report and dismissed the head of the Bureau of Labor Statistics, underscoring the high stakes surrounding economic performance heading into the next election cycle.
The minutes highlight growing unease within the Fed over how tariffs and elevated asset prices could shape the outlook for growth and inflation:
All eyes are now on Fed Chair Jerome Powell, who will deliver his final Jackson Hole address this Friday before his term expires in May. Markets are on edge to see if Powell sides with those calling for cuts to shield the economy from labor market weakness, or with members prioritizing inflation control.
Bitcoin, which has become increasingly sensitive to macroeconomic shifts, saw heightened volatility following the release of the minutes. Traders are bracing for Powell’s words to set the tone for the next major market move.
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