US Federal Reserve officials diverged at their June meeting about how aggressively they would be willing to cut interest rates, split between concerns over tariff-fueled inflation and signs of labour market weakness and economic strength.

Minutes from the June 17-18 meeting released Wednesday showed that policymakers largely held to a wait-and-see position on future rate moves. The meeting ended with Federal Open Market Committee members voting unanimously to hold the central bank’s key borrowing rate in a range between 4.25%-4.5%, where it has been since December 2024.

However, the summary also showed a growing divide over how policy should proceed from here.

“Most participants assessed that some reduction in the target range for the federal funds rate this year would likely be appropriate,” the minutes stated, as officials saw tariff-induced inflation pressures as potentially “temporary and modest” while economic growth and hiring could weaken. How far the cuts could go, though, was a matter of debate.