Most Federal Reserve officials highlighted inflation risks as outweighing concerns over the labor market at their meeting last month, as President Donald Trump’s tariffs fueled a growing divide within the central bank’s rate-setting committee.

Officials acknowledged worries over higher inflation and weaker employment, but a majority of the 18 policymakers in attendance “judged the upside risk to inflation as the greater of these two risks,” according to the minutes of the Federal Open Market Committee’s July 29-30 meeting.

Policymakers left interest rates unchanged in a range of 4.25% to 4.5% last month, citing elevated uncertainty in their outlook as economic activity moderated during the first six months of Trump’s term. Their statement at the time characterized the labor market as “solid” but said inflation remained “somewhat elevated.”

Indeed, the biggest spike in wholesale inflation in three years provided the latest sign that companies have begun to raise prices to offset rising input costs. Some Fed officials have voiced concerns that Trump’s trade war will influence prices well into next year. —David E. Rovella

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Citigroup hired law firm Paul Weiss to investigate complaints about the behavior of the bank’s wealth-management chief, Andy Sieg, 58, who was brought on by Chief Executive Officer Jane Fraser as a high-profile hire to drive a key part of her turnaround plan. Like much of Citigroup, the wealth business has carried out mass firings as Fraser seeks to eliminate thousands of her employees. Sieg, on a quest to shake up the unit, is said to have drawn complaints from current and former staff accusing him of intimidating and unfairly sidelining employees since he arrived almost two years ago. Examples of his alleged behavior include expletive-filled rants, sarcastically disparaging an executive to a group of colleagues after the person had left the room and calling an individual’s work “pathetic” with the person and colleagues present. Sieg didn’t respond to requests for comment.

Hedge fund investors are fed up with paying billions of dollars in opaque fees, so now they’re fighting back. Texas’ $200 billion pension fund for teachers, New Mexico’s $17 billion pension plan and multifamily office Erlen Capital Management are among a group of investors shunning funds that charge fees they say eat too much into returns.

These investors are protesting so-called passthrough fees, which charge clients for practically all of a hedge fund’s expenses, from rent to travel to million-dollar pay packages. They can run from hundreds of millions of dollars into the billions—and that’s in addition to the standard 20% cut of profits firms take on their investment gains, and sometimes even an additional 2% fee to manage investors’ assets.

“If you’re taking more than half of the profits,” said Michael Shackelford, chief investment officer for Public Employees Retirement Association of New Mexico, “we won’t even talk to you.” 

US stocks are “in the early days” for a bubble, although the critical point for a correction has yet to come, Oaktree Capital Management co-founder Howard Marks said. “I’m certainly not ringing the alarm bells. The point is that things are expensive,” the co-chairman of the distressed debt investment manager told Bloomberg Television.

It’s been 16 years since investors last went through a “serious market correction,” he said. The current period reminds him of the late 1990’s when the market was falling in love with tech stocks, leading former Fed Chair Alan Greenspan to warn of “irrational exuberance.” Stocks closed down on Wednesday. Here’s your markets wrap.

US authorities are being pressed to step up efforts to combat the illegal gold trade, one of the largest and fastest-growing illicit economies in the Western Hemisphere as bullion prices surge. An illegal gold mining and trafficking boom in several South American nations has become a crisis too large for the US to ignore, according to a report from the Financial Accountability and Corporate Transparency Coalition. In Colombia and Peru, illegal gold is estimated to generate more money for organized crime than the drug trade.

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