WASHINGTON — Minutes from the Federal Open Market Committee’s April 29–30 meeting, released Thursday afternoon at 2 p.m. Eastern, revealed a sharply divided committee on the trajectory of rate cuts through the summer, with “several” participants identifying July as the earliest appropriate date for action and “a number” of others arguing for September or later. The minutes landed in a market context already substantially shifted by Wednesday’s softer-than-expected April Consumer Price Index report and the Thursday-morning Producer Price Index print.

The document, which records the views of all 19 participating members on monetary policy and economic conditions, used language that several Fed-watchers immediately characterized as more dovish than the April policy statement had implied. The phrase “several participants” — Fed-meeting-minutes shorthand for a count of three to five — appeared in a paragraph noting that those participants believed inflation was “on a credible path back to target” and that “the risks to the dual mandate had become more balanced over the intermeeting period.”

By contrast, “a number” of participants — a slightly larger contingent in Fed-minutes nomenclature, typically five to seven — argued that “the path of inflation remained insufficiently established to warrant near-term policy action,” citing the recency of the wartime supply shock, the elevated state of geopolitical risk pricing, and the still-strong wage growth in private payroll data.

A third group, described in the minutes as “many participants,” noted that the committee’s reaction function “remained appropriately data-dependent” and indicated that the trajectory of incoming CPI, PPI and employment-cost data through May and June would be decisive in shaping the June 17–18 meeting’s outlook.

The minutes did not name the participants associated with each position, in line with Federal Reserve disclosure practice. Several outside analysts attempted to map the language onto known public-record positioning. Citi’s John Reilly, in a note to clients, attributed the “several” dovish camp to Federal Reserve Bank of San Francisco President Mary Daly, Federal Reserve Bank of Chicago President Austan Goolsbee, and Vice Chair for Supervision Philip Jefferson, with Governor Lisa Cook and Federal Reserve Bank of New York President John Williams as more uncertain.

The more cautious camp, Reilly suggested, included the Federal Reserve Bank of Cleveland President Beth Hammack, the Federal Reserve Bank of St. Louis President Alberto Musalem, Governor Christopher Waller and the Federal Reserve Bank of Dallas President Lorie Logan. Chair Marlene Lindgren, in this reading, would sit between the two camps, leaning toward the “many participants” framing.

Markets responded with a measured but clearly directional move. Two-year Treasury yields fell three additional basis points to 3.63 percent in the hour after the minutes’ release, the lowest reading since the late-January period before the wartime spike. The dollar weakened modestly, with the ICE Dollar Index falling to 101.4. S&P 500 futures, which had been trading roughly flat ahead of the release, pushed higher in the afternoon to close 0.4 percent above the prior day, with rate-sensitive sectors leading.

Fed funds futures, which had repriced sharply Wednesday on the CPI release, moved further to imply 71 percent odds of a quarter-point cut at the July 29 meeting, up from 63 percent on Wednesday afternoon. Markets now imply roughly 95 percent odds of at least one cut by September and a non-trivial 14 percent probability of a 50-basis-point cumulative cut by that meeting.

“The minutes do not commit the committee to anything, but they unmistakably move the goalposts,” said John Reilly of Citi. “The April meeting was the first one held in a clearly post-war context, and the staff and the participants used it to take stock. What the document tells you is that the disinflation case has gained meaningful internal support since March. Combined with Wednesday’s CPI print, the July move has gone from a tail to a base case.”

The minutes also contained a substantial discussion of financial-stability considerations. Several participants noted that the wartime spike in oil and the subsequent normalization had not produced the dislocation in funding markets that had been feared during the late-March escalation, and that the broader credit picture had remained orderly. A separate paragraph discussed the impact on inflation expectations of the rapidity with which the post-war Brent price had normalized, with one participant explicitly noting that the speed of normalization had been “an important signal” for the credibility of policy.

A senior FOMC participant, contacted Thursday afternoon for context on the minutes, said the document should be read as “a snapshot of where the committee was at the end of April, not a forward commitment.” The participant, who spoke on background, noted that the April CPI release, the IEA demand cut, and Wednesday’s softer PPI print had collectively changed the data picture in a way that the April minutes could not have anticipated, and that the June 17–18 meeting would re-examine the trajectory in light of those data points.

PPI for April, released Thursday morning before the minutes, came in at 0.1 percent month over month and 2.2 percent year over year, both readings two-tenths softer than the consensus expectation. Core PPI, which is generally a more reliable input to the Fed’s preferred PCE inflation measure, rose 0.1 percent on the month and 2.5 percent year over year. The combination of softer CPI on Wednesday and softer PPI on Thursday has prompted several economists to revise their April core PCE estimate down by a tenth.

A senior research economist at Goldman Sachs, in a Thursday-afternoon note, said the firm now expected April core PCE to print at 2.6 percent year over year when released May 30, the lowest reading since early 2021. The firm continues to expect the FOMC to begin its rate-cutting cycle at the July meeting, with the September move now described as “essentially baseline.”

The next major data points in the Fed’s reaction function are retail sales, scheduled for Friday morning, and the May employment cost index, due in late July. The Fed’s blackout window for the June meeting begins May 31, leaving roughly two and a half weeks during which sitting committee members can address the markets on the record.

Federal Reserve Bank of Dallas President Lorie Logan, the only sitting voting member scheduled to speak Thursday evening, is expected to address the post-minutes market reaction in remarks at a financial-stability conference in Houston.