FOMC April 28–29 Minutes: Officials Explicitly Discussed Rate Hikes; Miran Wanted Cut; Hammack, Kashkari, Logan Opposed Easing Bias

The Federal Reserve released the minutes from the April 28–29 FOMC meeting on May 20, 2026 — the final meeting chaired by Jerome Powell before Kevin Warsh assumed the chairmanship on May 15. The minutes revealed a Federal Open Market Committee that is significantly more divided and hawkish than the public statement suggested. **Key revelations from the April 28–29 minutes:** **Rate Hike Discussion Now Explicit:** A majority of officials warned during the April 28–29 meeting that the Fed may need to consider raising rates if inflation remained persistently above the 2% target. This marks the first time since the post-COVID tightening cycle that FOMC members explicitly discussed rate hike scenarios as a plausible policy path — rather than discussing only the timing of cuts. **Dissent Breakdown:** - **Stephen Miran** (sole dissenter): Voted for a 25 basis point rate cut — arguing policy remained overly restrictive given labor market cooling - **Beth Hammack, Neel Kashkari, Lorie Logan**: All three opposed retaining any easing bias in the FOMC statement, calling for the removal of language suggesting the next move would likely be a rate cut - The April 29 statement was ultimately a unanimous hold at 3.50–3.75%, but the internal divisions were sharper than the headline suggested **Inflation Assessment — 'Ugly':** Officials noted that 'economic activity [was] expanding at a solid pace' but that 'job gains [were] low on average' and inflation was 'elevated, partly due to energy prices.' The description of the inflation path as 'elevated' while simultaneously warning of potential rate hikes represents the classic stagflation trap: raising rates risks recession; cutting rates risks entrenching inflation; holding risks credibility erosion. **Implications for Warsh's June 16–17 FOMC:** The release of these minutes just five days into Warsh's chairmanship (May 15–) sets up the June 16–17 FOMC meeting as one of the most consequential in years. Warsh takes over a committee where three members actively opposed retaining an easing bias, and a majority discussed rate hikes — while simultaneously being asked to manage a $6.7T balance sheet reduction program. The minutes confirm that CME FedWatch's ~30% rate hike probability by year-end 2026 reflects genuine internal Fed debate, not just market speculation. **Fed Balance Sheet Battle — Barr vs. Warsh:** Also on May 20, Axios reported that Fed Governor Michael Barr publicly pushed back against Warsh's plan to aggressively reduce the Fed's $6.7T balance sheet, calling balance sheet reduction 'the wrong objective' and warning it would undermine bank resilience and money market stability. Barr's intervention marks the first public intra-Fed conflict of the Warsh era — and sets up a proxy war at the June FOMC over the QT pace that will directly determine the trajectory of long-term Treasury yields (30Y already at 5.189% on May 19, an 18-year high).