Divided Federal Reserve officials indicated at their last meeting that they will address persistent inflation this year with one interest rate hike. History, though, suggests that policymakers will have a hard time stopping there. In fact, there have been few instances over the past 35 years or so when the Fed has only made one rate move, be it up or down. Rather, the central bank's Federal Open Market Committee tends to move in rate cycles, where it adjusts policy multiple times over a period to meet whatever goal it seeks to accomplish. "A lot of people are talking about one rate increase. The committee does not generally do that. I mean, what's the point of that?" former St. Louis Fed President Jim Bullard told CNBC on Monday. "So, usually it means a tightening cycle, and I think markets are trying to sniff that out right now." Markets will get more clues Wednesday about the Fed's policy direction when the committee releases minutes from its June 16-17 meeting . The summary will provide a glimpse behind the curtain of new Chairman Kevin Warsh 's first meeting, which he characterized last month as "a good family fight" on the direction of rates. The last meeting featured an update on participants' views on rates and key economic metrics and a dramatically shortened statement that flatly stated, "The Committee will deliver price stability." In the "dot plot" grid of individual participants' rate expectations, the committee leaned to a hike before the end of 2026 and then one cut each in the next two years. But the FOMC's history is that it rarely makes one-off rate adjustments. In the last cycle, it cut three times in the back half of 2025. Before that, the Fed cut three times in 2024, hiked 11 times between 2022-23 and cut five times between 2019-20. In fact, you'd have to go back to 2015 for the last time the committee made just one move, and that was primarily because it considered the economy too unstable for a previously planned hiking cycle. Going back to 1990, such moves were rarely seen. The reasoning is fairly straightforward: Officials think policy needs to be persistent and aggressive, and modest tweaks like quarter-point moves rarely help when the Fed is trying to solve a problem. In this instance, the central bank's problem is inflation that is running well above its 2% target for the past five years. Some officials believe an easing of hostilities in the Middle East, a decline in oil prices and the fading impacts of tariffs could help ease price increases, but there is significant disagreement on whether the trend is down or up. Bullard isn't as convinced inflation will unwind and thinks the Fed may have to act soon before the November midterm election, even if there's a perception that an increase would be politically risky. President Donald Trump , in particular, could get restless after appointing Warsh to succeed now-Governor Jerome Powell , whom the president frequently...
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