FOMC Minutes - 2026-05-19

The committee shows little evidence of understanding the difference between the price level rising (a) because of a supply shock to oil, as opposed to (b) inflation. It's all just "inflation." Despite such an imprecise use of important technical terms, were relieved to see that "Several participants indicated that, in a scenario in which the conflict was resolved soon, rate reductions would be warranted later this year if the effects of higher tariffs and energy prices on inflation were to dissipate in line with their expectations." And we'd never have thought we'd agree with Stephen Miran's swan song: "One participant preferred to lower the target range for the federal funds rate 25 basis points, noting concerns that the current policy stance was overly restrictive in a situation of downside risks to the labor market."