Fed FOMC Minutes: Inflation Path Longer Than Expected, More Rate Hikes Still on the Table!

The Federal Reserve's April FOMC meeting minutes revealed that most officials believe inflation will take longer than previously anticipated to return to the 2% target. Contributing to the upside inflation risks are higher energy prices, the ongoing Middle East conflict, tariffs, and AI-related investment costs — a broader and more entrenched set of pressures than the Fed had been working with in earlier projections.

Most participants signaled that additional policy tightening remains a live option if inflation stays persistently above target. The minutes also left the door open for rate cuts, but only if inflation eases materially or labor market conditions deteriorate — conditions that, as of the April meeting, had not been met.

For markets, the minutes reinforce a higher-for-longer rate environment. Risk assets including crypto face continued headwinds as long as the Fed's…