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The minutes of the Federal Reserve’s policy meeting last month may indicate on Wednesday how many policymakers feel the U.S. central bank is done raising interest rates and whether possible risks to the economy from the aggressive monetary tightening have taken on more weight in their debate.

The Fed raised its benchmark overnight interest rate to the 5.25%-5.50% range at the July 25-26 meeting, a step Fed Chair Jerome Powell said at his post-meeting press conference may not be the last in an aggressive round of rate increases that began in March 2022 to offset the fastest breakout of inflation since the 1980s.

But Powell also said the “pieces of the puzzle” were beginning to fall into place to push inflation lower, including improved supply chains, a moderation in the demand for workers, and tighter lending conditions.

The minutes, which are due to be released at 2 p.m. EDT (1800 GMT), may show how much faith different groups of Fed officials have in a continued decline in inflation, or whether the bulk of them still feel another rate increase is likely needed, as most of them did in their last round of economic projections in June.

An additional quarter-percentage-point rate increase, whether at the Fed’s Sept. 19-20 meeting or later in the year, would be marginal in its macroeconomic impact, a small addition to the 5.25 percentage points the Fed has added to its policy rate over the 16 months ending in July.

It would, however, send an important signal to bond and stock markets that are largely convinced the central bank is finished raising rates and will now begin looking for the right moment to start cutting.

“There appears to be little consensus amongst policymakers regarding the path ahead,” wrote Citi analyst Andrew Hollenhorst, who said he will look to the minutes for “the leading edge of a debate about the appropriateness of keeping policy rates elevated even as job growth and inflation have recently cooled.”


The minutes include references to how officials assess the economy, the likely path of inflation, appropriate monetary policy, and the chief risks to policymakers’ outlook.

The document, issued three weeks after a policy meeting, is always at risk of seeming outdated and is often reiterative of points the Fed chief makes in post-meeting press conferences, or overrun by data that has come out in the meantime.

Powell, for example, confirmed at his press conference last month that Fed staff had changed their forecast and removed the expectation the economy would slip into recession, a point that would otherwise have only been revealed in the minutes.

And whatever the debate among policymakers as of the July 25-26 meeting, data since then has confirmed a continued hiring slowdown along the lines Fed officials have hoped might help cool the job market, while the closely-watched personal consumption expenditures price index excluding food and energy posted its first significant drop since 2022. The core PCE index fell in June to 4.1% from 4.6% in May, a fact only released after the Fed meeting, though economists expected the decline.

Since the July meeting, Philadelphia Fed President Patrick Harker has joined Atlanta Fed President Raphael Bostic in saying no more rate increases were needed.

Other central bank officials, including New York Fed President John Williams, a vice chair and permanent voting member on the rate-setting Federal Open Market Committee, have begun discussing the timetable for possible rate cuts – even as they’ve pushed that possibility off into next year.

“The mixed messaging indicates that the Fed, or at least a substantial portion of the Fed, is worried that policy could quickly become too tight” if inflation continues lower but credit markets continue to restrict lending, wrote Tim Duy, chief U.S. economist at SGH Macro Advisors.

If market interest rates “break higher … the Fed is going to have a problem. It could quickly need to make a choice between taking the chance that inflation is not completely under control or trying to keep the hope … alive” of lowering inflation without a large rise in unemployment.