A brewing debate inside the Federal Reserve over how to address risks posed by President Trump’s tariffs threatens to end a period of relative unity, with officials potentially at odds over whether new cost increases justify keeping interest rates high. Minutes of the Fed’s June 17-18 policy meeting pulled back the curtain on an emerging split inside the central bank’s rate-setting committee. Meanwhile, South Korea's central bank kept rates steady and a Bank of Japan report highlighted growing worries over higher U.S. tariffs among companies.

In recent weeks, Fed Chair Jerome Powell has indicated the central bank might have a slightly lower bar for cutting rates than seemed possible this spring, when larger tariff increases threatened to meaningfully push up prices while weakening the economy.

A rate cut isn’t expected this month. Instead, Powell has sketched out a middle ground where milder-than-expected price readings or softer employment data might be enough to justify cuts by the end of the summer—a lower threshold than more obvious signs of deterioration the Fed might have required when larger tariff hikes prompted forecasts of more sharp inflation increases.

A majority of Fed officials at their meeting last month expected they would be able to resume interest-rate cuts this year, but only two of them voiced support for a rate cut as soon as the central bank’s next gathering later this month, minutes of the meeting show. The release of the internal discussion coincides with White House pressure on Fed Chairman Jerome Powell to cut rates.

The U.S. will charge a 50% tariff on Brazilian goods starting on Aug. 1, President Trump announced in a letter to the Latin American country’s government on Wednesday, citing legal action against its former President Jair Bolsonaro and U.S. tech firms as justification for the levies.

• Brazil Won’t Take Orders From Trump, President Says

One man who lost his job in his early 60s is transitioning into retirement by working 25 hours a week. A woman who recently got laid off in her 50s worries about her finances if she doesn’t get a new job. A bumpy transition often awaits people who get laid off or take buyouts late in their careers. For many, the line between working years and retirement starts to blur. It is a growing concern for people with jobs in the federal government or at private companies cutting jobs.

8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: OMFIF event with Federal Reserve Bank of St. Louis President Alberto Musalem
12 p.m.: Monthly U.S. Retail Chain Store Sales Index
12:30 p.m.: Federal Reserve Bank of Dallas and World Affairs Council of Dallas/Fort Worth host conversation with Federal Reserve Governor Christopher Waller
2 p.m.: U.S. Securities and Exchange Commission Closed Meeting
2:30 p.m.: Federal Reserve Bank of San Francisco President Mary Daly speaks at MNI Connect event
4:30 p.m.: Federal Discount Window Borrowings
4:30 p.m.: Foreign Central Bank Holdings

12 p.m.: World Agricultural Supply & Demand Estimates

America's housing shortage grew to an all-time high of 4.7 million units, according to Zillow. This deepening housing deficit remains the prime driver of the nation's housing affordability crisis. Construction boomed in response to high demand and price growth during the early years of the pandemic. But that hasn't been enough to keep up with the growing population, let alone undo nearly two decades of underbuilding. In 2023, 3.4 million homes sat vacant and available for rent or for sale, according to U.S. Census data. Meanwhile, 8.1 million families shared their homes with people who weren't related to them. "While some people choose to live with roommates, most of these families would probably prefer their own place if one were available that they could afford," Zillow says. — Chris Wack

• European Central Bank policymakers should brace for inflation changing more rapidly amid shifting trade policy and geopolitical uncertainty, the leader of Germany’s central bank said Wednesday.
• While the oil market frets about an eventual oversupply of crude oil pushing prices down to levels that will curb investment, the world is looking at a shortage of diesel fuel that threatens to raise transport and heating costs next winter.
• More U.S. warehouse space is vacant than at any time in the past 11 years as companies hold off leasing new space amid rapidly changing trade policy.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by news associate Roshan Fernandez in New York. Send your tips, suggestions and feedback to roshan.fernandez@wsj.com.