Fed officials’ concerns about inflation sparked talk of rate hike during last meeting

EconomyFed officials’ concerns about inflation sparked talk of rate hike during last meetingInflation pressures have been aggravated by the U.S.-Israel-led war against Iran.Listen to this article with a free account00:0000:00Marriner S. Eccles Federal Reserve Board Building in in Washington, D.C. Andrew Harnik / Getty ImagesShareAdd NBC News to GoogleMay 20, 2026, 2:36 PM EDTBy ReutersFederal Reserve officials’ concerns about inflation being stoked by the Iran war intensified last month, with a growing number of them saying the central bank should lay the groundwork for a possible rate hike, a sign that incoming Chair Kevin Warsh will inherit an increasingly hawkish crew of central bankers.Subscribe to read this story ad-free Get unlimited access to ad-free articles and exclusive content.Moreover, a majority of Fed policymakers at their April 28-29 meeting said some policy tightening may be needed were inflation to continue running persistently above the central bank’s 2% target.“To address this possibility, many participants indicated that they would have preferred removing the language from the postmeeting statement that suggested an easing bias regarding the likely direction of the Committee’s future interest rate decisions,” minutes of the meeting said.The readout of the most divided Fed policy meeting in a generation added critical detail about shifts in two blocs of Fed officials waiting to greet Warsh - a growing one wary of the inflation arising from the war in Iran and of any talk of future rate cuts, and a diminishing one still leaning toward lowering borrowing costs.The main culprit for the further hawkish drift among policymakers was - again - the inflation pressures that have been aggravated by the U.S.-Israel-led war against Iran. The nearly three-month-old conflict has driven up energy prices and fanned cost pressures across a widening array of goods and services.The minutes showed that April’s meeting - the last chaired by Jerome Powell - was the sec...