Several Fed officials wanted to raise rates last month. If inflation doesn't come down, more of them see hikes.

Several members of the Federal Reserve favored raising interest rates at the central bank’s policy meeting last month, even as most supported holding rates steady, according to minutes from the meeting released Wednesday.

Those who favored raising rates noted that price pressures appeared broad-based and thought rates should be higher to restrict the economy and bring down inflation.

Three voting members of the Fed — Cleveland Fed president Beth Hammack, Dallas Fed president Lorie Logan, and Minneapolis Fed president Neel Kashkari — dissented, preferring to raise rates by a quarter percentage point. Since the meeting, other officials have spoken, including Kansas City Fed president Jeff Schmid, who also suggested that rates should be higher to rein in inflation.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

Most participants supported holding rates steady and believed forthcoming data before the next policy meeting would offer more clarity and reduce uncertainty about the inflation outlook.

Since the meeting, an inflation report on the Consumer Price Index for July showed prices cooled for the second month in a row, while wholesale prices showed more of a mixed bag.

In the meeting, many members of the Fed said raising rates would be necessary if inflation does not come down.

“With regard to the outlook for monetary policy, participants reiterated that their interpretations of incoming information would be a key component of their deliberations. Many participants assessed that policy tightening would likely be necessary if inflation did not decline,” the minutes read.

Various members suggested that bond yields had risen partly due to strong economic growth and market expectations that the Fed would raise rates before long.

Most expected inflation to ease over the rest of the year as the effects of tariffs and earlier energy price increases wane, but many noted the possibility that inflation might remain more persistently elevated. Several thought that the pass-through of price increases from earlier tariffs was now largely complete and that the effects of recently announced tariffs on inflation would likely be modest. New York Fed president John Williams has been in that camp.

When it came to the impact of the AI build-out on inflation, several thought the effect on consumer prices had so far been limited to select categories, namely computers and smartphones. But several others viewed investment in AI as already having broader effects on prices by pushing up demand, or they assessed that it would likely do so soon.

Confirming earlier reporting by the New York Times, the minutes revealed that Fed Chairman Warsh suggested to the committee that a reduced cadence of six scheduled meetings per year, held roughly every two months, would allow more information to accumulate between meetings and give policymakers more time to consider how to set rates. The Fed currently meets eight times a year.

Warsh asked for input from the rest of the Fed, and no decisions regarding possible changes in the meeting schedule were made. Warsh indicated that any change in practice would not affect the schedule over the balance of 2026, according to the minutes.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance, she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance. Follow her on X @Jenniferisms and on Instagram.

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