FOMC Minutes - 2026-04-07

Of course, there was talk of energy prices making inflation higher and stickier -- a "vast majority" of participants noted this. But a "vast majority" also noted the two-sided risks we face here: an energy shock, aside from its effect on prices, could threaten the labor market, and for "most participants... would warrant further rate cuts." Two-handed to be sure. But by our reading, the emphasis is on the latter risk. It feels to us as though the Fed, unlike the zealots at the ECB and the BOE, recognizes that the real mission here is to avoid an oil-shock recession.