The latest meeting minutes released by the U.S. Federal Reserve show that policymakers at the central bank are considering further raising interest rates to lower stubbornly high inflation.
Central bank officials in America expressed concern at their most recent meeting about inflation and said more interest rate hikes could be needed in coming months unless conditions change.
A two-day July meeting resulted in a quarter percentage point interest rate increase that markets had, until now, expected to be the last one in the current monetary policy tightening cycle.
The July rate increase brought the Fed’s key borrowing level, known as the Federal Funds Rate, to a range of 5.25% to 5.50%, its highest level in more than 22 years.
However, discussions showed that most members at the U.S. Federal Reserve remain worried that the inflation fight is not yet over and could require additional tightening.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” read the meeting minutes.
While some central bank officials have said that they think further interest rate hikes could be unnecessary, the minutes showed that many policymakers remain cautious.
The meeting minutes stressed that several variables remain in play for the U.S. economy and inflation, and that future decisions will be based on incoming data.
Inflation in the U.S. currently sits at an annualized 3.2%, down from a peak of 9.1% reached in June 2022.
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