Fed minutes reveal split debate on rates under new chair

The Federal Reserve on Wednesday released the minutes from its first policy meeting under new Chairman Kevin Warsh, offering markets a detailed look at the contentious internal debate that led officials to hold interest rates steady last month while projecting a potential future increase. The document, from the June 16-17 Federal Open Market Committee meeting, reveals a deeply divided committee grappling with persistent inflation and a shifting communication strategy under its new leader.

Following the meeting, the FOMC announced it would keep the benchmark federal funds rate unchanged in a range of 3.50% to 3.75%, marking the fourth consecutive meeting without a change. However, updated economic projections showed a shift in expectations, with the median forecast pointing to one quarter-percentage-point rate hike before the end of the year. The minutes confirm the committee was split on this outlook, with officials nearly evenly divided between those advocating for a rate increase and those preferring to hold steady.

Inflation, which has remained above the Fed's 2% target for several years, was a central focus of the discussion. The minutes note that some officials expressed...