Federal Reserve minutes from the July 28-29 meeting, released Wednesday, indicated a 9-3 vote to hold the key rate at about 3.6% while showing broader support for potential increases if inflation does not subside. Many participants assessed that higher rates would likely be necessary, judging their inflation outlooks highly uncertain with risks skewed to the upside due to tariffs, renewed hostilities in the Middle East boosting gas prices and heavy AI infrastructure investments. Inflation has shown some cooling with core CPI at 2.5% in July, but officials noted core PCE prices are expected to have risen 3.3% and acknowledged the possibility of more persistently elevated inflation. At the news conference, new Chair Kevin Warsh provided little guidance on next steps without fully committing to rate hikes, unnerving investors and pushing longer-term yields higher to 4.7% on the 10-year note before the Treasury announced it would buy back more bonds. Wall Street investors now expect the Fed to remain on hold in September and potentially raise rates in December. Some participants also highlighted risks from debt-funded AI spending by technology companies via share sales and bond issuance that could pressure prices, stocks and financial markets if earnings disappoint.