The Fed may consider raising interest rates if inflation accelerates, according to minutes from the last meeting. Home sales fell in April due to high mortgage rates, while Citigroup agreed to pay $78 million to U.K. regulators for a “fat finger” trade error. Inflation in the U.S. is expected to settle around 3%, higher than the Fed's 2% target. Junk bonds have a low premium, indicating confidence in the economy despite concerns over a slowdown.

The Federal Reserve is facing a challenging decision as it weighs the potential impact of inflation, interest rates, and the economy. According to minutes from the last Fed meeting, officials debated whether the current key interest rate, now at a 23-year-high, is exerting enough of a drag on the economy to slow inflation.

Recent data suggests that inflation in the United States is expected to settle around 3%, higher than the Fed's 2% target. This persistently high inflation rate is concerning for the Fed, especially as it comes at a time when the housing market is experiencing a downturn. In April, home sales fell due to high mortgage rates.