Fed Minutes Release Highlights Inflation Concerns, Dual Dissent at July Meeting

August 20, 2025

WASHINGTON - Minutes from the Federal Open Market Committee’s July 29–30 meeting, released Wednesday, show that most Fed officials see inflation risks as more pressing than labor market concerns. However, two governors disagreed and wanted an immediate rate cut.

Most participants agreed to keep the federal funds rate between 4.25% and 4.50% at this meeting.strong>”. Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller voted against keeping rates steady. They pushed for a 25-basis-point cut to help the softening labor market.

Fed officials extensively discussed the impact of higher tariffs on inflation./strong>. Participants noted that tariffs were starting to affect some prices. However, they were unsure about the overall impact on the economy and how long inflation might last.

The minutes noted that, despite lower job gains for May and June and a disappointing July payroll report, inflation was still the top worry./strong>. “The document stated, “Most participants saw the upside risk to inflation as the bigger risk.”

Market reaction was muted following the release. Treasury yields held near recent levels, with the 10-year at approximately 4.30% and the 2-year at 3.75%. Traders continue to price in an 83% chance of a quarter-point rate cut at the Fed’s September 16–17 meeting.

The minutes are released two days before Chair Jerome Powell’s keynote at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming. People will be looking for hints on when and how fast policy easing may occur.