Fed meeting notes highlight disagreement over impact of Trump tariffs on inflation

The Federal Reserve's July meeting notes show that while many remain concerned about inflation risks, some rate-setters are gradually abandoning the Fed's hesitancy to lower borrowing costs. While some rate-setters still hope to learn something from the data to be released in the coming months, others believe they may need to make a decision on whether to lower borrowing costs before then, the meeting notes show. Some members noted that it is neither feasible nor appropriate to wait until the impact of tariffs on inflation is fully clear before adjusting the stance of monetary policy. At the July meeting, a vote split emerged for the first time this year, with Fed governors Waller and Bowman supporting a 0.25 percentage point rate cut. Their disagreement marks the first time since 1993 that two governors have disagreed with the Fed chair. Notably, Waller and Bowman are already on the Treasury shortlist to succeed Powell when his second term ends in May 2026.