Fed holds 3.6%; 18 projections split between hikes and cuts

A 3.6% policy rate and an evenly divided projection set made the July 8 FOMC minutes a Tier-1 macro event. The Federal Reserve released minutes for its June 16-17 meeting after holding rates steady, and AP reported that half of the 18 policymakers who submitted forecasts supported lifting rates by year-end while the other half supported keeping rates unchanged or reducing them.

The split was less about the current vote and more about the inflation path. The committee approved the June hold unanimously, but the minutes said a few officials saw a case for raising rates at that meeting. The published debate puts inflation persistence, not labor-market weakness, at the center of the next policy decision.

AI infrastructure was a notable addition to the inflation discussion. Officials cited strong demand for semiconductors, technology equipment, and electricity as possible sources of upward price pressure. That matters for markets because the same AI investment cycle supporting megacap earnings can also keep rates higher through electricity and component costs.

The Fed’s 2% inflation objective remains the anchor, while AP reported May inflation at 4.2% and New York Fed one-year consumer inflation expectations at 3.7%. Those numbers make the next CPI and PCE releases more important than a simple rate-cut timetable.

Next checks are the July FOMC statement, the June inflation prints, and whether Treasury yields continue to price a higher-for-longer path after the minutes.