Morgan Stanley: Fed Minutes May Reveal Deepening Divisions Within the Committee

The latest dot plot reveals a clear division within the Federal Reserve. Some policymakers anticipate two rate cuts this year, while others predict no cuts at all. Morgan Stanley analysts have stated they will look for clues behind this divergence. The more hawkish members may indicate they are waiting for the unemployment rate to rise, or that they need more time to assess the impact of tariffs and other fiscal policies on inflation. Powell has previously said he expects the inflationary effects of tariffs to become apparent this summer, suggesting that the only obstacle between the Fed and an easing policy is the uncertainty surrounding these price pressures. If the meeting minutes show partial agreement with this view, it could signal a shift by the Fed toward a more proactive stance. (Jin10)