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Matthew 5:22, KJV says

But I say unto you, That whosoever is angry with his brother without a cause shall be in danger of the judgment: and whosoever shall say to his brother, Raca, shall be in danger of the council: but whosoever shall say, Thou fool, shall be in danger of hell fire.

The final two clauses are separated by ": but" which indicates that they are in contrast with each other. Hell seems worse than "the council" - does this mean that saying "you fool" is worse than calling someone a forbidden term of contempt ("Raca?")

I looked at other translations than the KJV, and I found where the clauses are separated by "and" instead of "but." This indicates that Jesus is somewhat repeating himself for emphasis, and perhaps even saying that they are nearly as bad as each other.

The NIV says:

But I tell you that anyone who is angry with a brother or sister will be subject to judgment. Again, anyone who says to a brother or sister, ‘Raca,’ is answerable to the court. And anyone who says, ‘You fool!’ will be in danger of the fire of hell.

Young's Literal Translation says:

but I -- I say to you, that every one who is angry at his brother without cause, shall be in danger of the judgment, and whoever may say to his brother, Empty fellow! shall be in danger of the sanhedrim, and whoever may say, Rebel! shall be in danger of the gehenna of the fire.

In conclusion, Jesus is saying being angry at people without good reason, calling people forbidden epithets, and simply saying "you fool" are all things that should not be done.

What does Jesus mean regarding “Raca,” and “you fool?” - is he contrasting them?

According to the Aramaic language reka means empty one.

Matthew 5:22

Matthew 5:22 is the twenty-second verse of the fifth chapter of the Gospel of Matthew in the New Testament and is part of the Sermon on the Mount. It is the first of what have traditionally been known as the 6 Antitheses. In this one, Jesus compares the current interpretation of "You shall not murder" from the Ten Commandments with his interpretation.

The word Raca is original to the Greek manuscript; however, it is not a Greek word. The most common view is that it is a reference to the Aramaic word reka, which literally means "empty one", but probably meant "empty headed," or "foolish." Scholars seem divided on how grievous an insult it was. Hill feels it was very, France thinks it was a minor slur. The word translated as fool is the Greek moros, which has a similar meaning to the Aramaic reka. However moros also was used to mean godless, and thus could be much more severe a term than reka. It is very similar to the Greek word for apostate, and Albright and Mann feel that this word was originally intended, but the current version is a typo. Read Ref.; The reading of godless can explain why the punishment is more severe.[13] Jesus uses the term himself in Bible ref Matthew 23:17; (sticking the tribute were?)Nomenclature; when he is deriding the Pharisees.

This verse has also recently become part of the debate over the New Testament view of homosexuality. Some scholars have argued that raca can mean effeminate, and was a term of abuse for homosexuals. Similarly moros can also refer to a homosexual aggressor; as Bible ref Gen 19.4-6. From Semitic cognates Warren Johansson argued that the word was an Aramaic pejorative, similar to the English words faggot or fairy. By these interpretations Jesus could be specifically condemning homophobia. Most scholars reject this view, considering it more likely that the terms were meant as general insults, rather than specific attacks on homosexuals. See also the Bible and homosexuality.

In this passage the Greek uses an Aramaic term of contempt (requ). Devaluation of people is a sin that can be manifested in various ways – here it is an expression of anger used against another person. These verses are about the hypocrisy of the religious teachers of the Law and the Pharisees. In verse 21, Jesus highlights the fact that although the Law prohibited murder, their traditions did not prohibit hatred. Jesus shows that although the Law would bring judgment on a murderer, God will bring judgment on people who can’t control their anger. Calling someone an idiot could result in being taken to court, but Jesus is exposing the danger of cursing another person out of hatred. It’s all about the evil thoughts and intentions of the heart that pour out from the mouth in anger.

O generation of vipers, how can ye, being evil, speak good things? for out of the abundance of the heart the mouth speaketh. A good man out of the good treasure of the heart bringeth forth good things: and an evil man out of the evil treasure bringeth forth evil things. But I say unto you, That every idle word that men shall speak, they shall give account thereof in the day of judgment. For by thy words thou shalt be justified, and by thy words thou shalt be condemned. (Matthew 12:34-37)

This short explanatory extract comes from a Protestant perspective:

There is an important distinction between the biblical definition of a fool and the word Jesus used (raca) in Matthew 5:22 when He forbade calling a Christian brother a “fool.” The term raca, spoken from a heart of contempt, implied utter worthlessness. Jesus was not saying that we cannot call the choices of another foolish. But to call someone “raca” was saying that this person was beyond the reach of God and therefore condemned forever. To say, “You fool!” to a brother or sister in that day was the equivalent of saying, “Damn you!” to someone today. We do not have the power or the right to condemn anyone to hell. That position of judgment belongs only to God. A born-again Christian cannot be “damned” because he or she has been purchased by the blood of Christ (Colossians 1:14). We can and should, however, do all we can to turn the hearts of those exhibiting foolishness toward wisdom and possibly save their lives and their eternal souls (James 5:20). Source: https://www.gotquestions.org/fool-Bible.html

Jesus seems to be using "the judgement," "council" and "hell" in the spiritual sense, or at least hinting at the fact that "hellfire" is the result of a bad verdict at "the Judgement," and the divine "council." As is also the case a few verses later, where He clearly isn't speaking on tips for avoiding jailtime, but of the kingdom of heaven: "Be at agreement with thy adversary betimes, whilst thou art in the way with him: lest perhaps the adversary deliver thee to the judge, and the judge deliver thee to the officer, and thou be cast into prison. Amen I say to thee, thou shalt not go out from thence till thou repay the last farthing" (Mt. 5:25-26).