FOMC Minutes: 9 Out of 11 Officials Prioritize Inflation Fight Over Employment Risks

Washington D.C. – The Federal Reserve's Federal Open Market Committee (FOMC) minutes, released on August 20, 2025, indicate a clear majority of policymakers view inflation as a greater risk to the U.S. economy than rising unemployment. The minutes from the July 29-30 meeting revealed that nine of the eleven voting members supported holding interest rates steady, emphasizing the persistent concern over elevated inflation. This stance comes despite recent signs of a weakening labor market and ongoing debates about the economic impact of tariffs.

The minutes highlighted a significant division within the central bank, with two Governors, Christopher Waller and Michelle Bowman, dissenting in favor of a quarter-point rate cut. Their concern stemmed from a weakening job market, evidenced by lower-than-expected July hiring figures and upward revisions to the unemployment rate. This internal debate underscores the complex economic signals the Fed is currently navigating.

A key point of discussion among FOMC members was the inflationary impact of tariffs. While some officials debated whether the effects would be temporary or more lasting, there was a consensus that it could take considerable time for the full impact of these trade policies to be felt across consumer goods and services prices. The tweet by Ash Crypto succinctly captured this sentiment, stating, "FED THINKS INFATION RISK IS HIGHER THAN UNEMPLOYMENT RISK. IT ALSO THINKS THAT TARIFFS IMPACT COULD TAKE SOME TIME."

Despite the Fed's cautious tone, market participants are largely anticipating a rate cut in September, with probabilities currently hovering around 85-94%. This anticipation suggests a disconnect between the Fed's internal deliberations and investor expectations. The central bank's decision to maintain the federal funds rate at 4.25%-4.50% for the fifth consecutive meeting reflects a desire to observe further economic data before making significant policy shifts.

The financial community is now keenly awaiting Federal Reserve Chair Jerome Powell's speech at the annual Jackson Hole Economic Policy Symposium on Friday, August 22. This address is expected to provide crucial insights into the Fed's future monetary policy direction, including any potential signals regarding rate cuts or quantitative easing, as noted by Ash Crypto: "LETS WAIT FOR FRIDAY SPEECH FOR MORE CLARITY ON RATE CUTS AND QE." The speech will be closely scrutinized for any indication of a shift in the Fed's current hawkish stance.