Divisions awaiting Warsh to be on display in Fed minutes release

Reuters reports that minutes of the April 28-29 Fed meeting will reveal deep divisions among policymakers on interest-rate direction as Kevin Warsh prepares to become Fed chair. The April meeting left the policy rate at 3.50%-3.75% with four dissents — the most since 1992 — underscoring a growing bloc wary of war-driven inflation and a shrinking group favoring cuts. Rising oil prices (over 50% since the Iran war) and recent elevated inflation and payrolls have pushed market expectations toward sustained or higher policy rates; the 2-year Treasury yield climbed from just under 3.40% on Feb. 27 to above 4.10%. Minutes are expected to clarify guidance and the balance of hawkish vs. dovish officials ahead of Warsh’s first meeting on June 16-17. Markets may interpret a hawkish tilt as negative for risk assets and supportive of higher short-term yields.