WASHINGTON — Federal Reserve officials agreed earlier this month to hold off on any interest-rate moves while they evaluated the impact of President Donald Trump’s tariffs on inflation, unemployment, and the broader economy.

According to minutes from their May 6-7 meeting, released Wednesday, “almost all” of the 19 officials that participate in the Fed’s meetings on policy saw a risk that “inflation could prove to be more persistent than expected.” The policymakers showed greater concerns about higher inflation than rising unemployment, the minutes showed, a key reason they left rates unchanged.

Fed Stands Firm Against Presidential Pressure

Their decision flew in the face of Trump’s repeated calls to reduce borrowing costs because, in his view, there is “NO INFLATION.” The central bank, led by Chair Jerome Powell, cut its key rate three times last year to about 4.3%. Federal Reserve staff economists said during the meeting that inflation “remained elevated,” the minutes showed.

Trump’s tariffs have created a dilemma for the Fed because the duties could both raise inflation — which the Fed would typically fight with higher interest rates — and slow the economy and push up unemployment, which the central bank usually tries to counter with lower rates.

Rising Economic Risks

Officials “judged that downside risks to employment and … upside risks to inflation had risen, primarily reflecting the potential effects of tariff increases,” the minutes said.

Since the meeting, many officials have underscored that the Fed may have to wait for some time before making any further moves with interest rates.

Policymakers said there was “considerable uncertainty surrounding the evolution of trade policy” and its impacts on the economy, the minutes said.

“Taken together, (officials) saw the uncertainty about their economic outlooks as unusually elevated,” the minutes said.

Inflation Concerns Mount

At the same time, at least some Fed officials expressed a range of concerns that tariffs would likely raise prices in the months ahead. Many policymakers said that their surveys and discussions with business leaders suggested that companies were likely to pass at least some or all of the cost of the extra duties on to consumers. Several of the officials said that companies not affected by the tariffs could seek to raise their prices if other companies did so.

And the fact that the economy recently experienced the highest inflation in 40 years in 2022 suggested that companies might be more willing to raise prices than previously, when consumers had little experience of inflation, several officials said.