Fed keeps rate unchanged, but nearly half of policymakers would support hike this year
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WASHINGTON (AP) -- The Federal Reserve kept its key rate unchanged Wednesday yet almost half the central bank's policymakers said they could support a rate hike later this year.
The unexpectedly aggressive tilt toward higher rates would disappoint President Trump and suggests heightened concerns about persistent inflation among Fed officials.
In an unusually short statement after their two-day meeting, the officials dropped language that had suggested their next move would be to cut the key rate. The brief statement reflects the influence of new chair Kevin Warsh, appointed by Trump, who has previously criticized the Fed for commenting too broadly on the economy.
Still, Warsh's 18 colleagues on the Fed's rate-setting committee sent a clear message in a set of quarterly projections released Wednesday: Nine signaled they supported higher rates this year, with six of those supporting two quarter-point increases. It's a sharp change from March, when no policymakers penciled in a hike and the committee as a whole forecast one cut in 2026. The change is an acknowledgement that inflation is at its highest level in three years and many officials have said in recent speeches that if inflation doesn't decline, higher rates may be necessary in the coming months.
All told, another eight officials signaled they would support keeping the rate unchanged, and one penciled in a cut. Warsh did not submit a forecast for how the Fed might change its key rate. He said he encouraged his colleagues to do so, but he has previously criticized the projections for potentially locking the Fed into a specific policy outlook.