Minutes from the Fed's July policy meeting revealed policymakers prioritized tariff-driven inflation risks over labor market concerns when keeping interest rates unchanged.

Inflation expectations derived from the bond market were rising on Friday, suggesting simmering concerns about future price gains despite Federal Reserve Chair Jerome Powell's willingness to consider cutting interest rates.

The central bank retired a previous strategy and on Friday unveiled a new approach that updates how inflation and employment are balanced.

Behind closed doors, officials at the Federal Reserve said much the same as they've said in public: that concerns over tariffs stoking inflation led them to keep the central bank's interest rate flat in July instead of cutting it.

Trump ratcheted up his pressure campaign this week, calling on Fed Governor Lisa Cook to resign after a Trump administration official alleged that she had committed mortgage fraud. Cook rebuked the push for her to quit, saying she has “no intention of being bullied to step down from my position because of some questions raised in a tweet.”

Most Federal Reserve officials highlighted inflation risks as outweighing concerns over the labor market at their meeting last month, as tariffs fueled a growing divide within the central bank’s rate-setting committee.

While opening the door for a September interest rate cut, Fed Chair Jerome Powell stressed the central bank would not let inflation get out of control. While there are already signs that tariffs have begun to push up prices,

Federal Reserve Chair Jerome Powell's speech at the annual Jackson Hole Economic Policy Symposium went better than expected.

Federal Reserve Bank of Chicago President Austan Goolsbee said while some recent inflation readings have come in better than expected, he hopes one “dangerous” data point is just a blip.