【Fed minutes: Most officials expect one more rate hike before year-end; rate-hike path is prudent】
According to the minutes released today, Fed officials expect to raise interest rates again before the end of this year to curb inflation, which has remained above target for more than five consecutive years. However, the minutes did not indicate when policymakers specifically expect to raise rates, saying only that persistently elevated prices and a stable labor market could prompt the Fed to raise rates for a second time this year. The minutes stated: “Regarding the monetary policy outlook after this meeting, most participants judged that another increase in the target range for the federal funds rate may be appropriate by the end of the year.”
“However, participants emphasized that they would approach each meeting with an open mind, and that decisions at future meetings would depend on incoming information and its implications for the economic outlook and the balance of risks.” Discussions at the September meeting showed that officials saw a risk that inflation could remain stubbornly persistent, while the labor market was “close to full employment” and overall economic growth had picked up. The minutes stated: “Many participants emphasized that, from a risk-management perspective, a path of increasing the target range for the federal funds rate would be prudent, providing insurance against the risk that inflation could remain above target because demand is stronger than expected or further adverse supply shocks occur.”
According to the minutes released today, Fed officials expect to raise interest rates again before the end of this year to curb inflation, which has remained above target for more than five consecutive years. However, the minutes did not indicate when policymakers specifically expect to raise rates, saying only that persistently elevated prices and a stable labor market could prompt the Fed to raise rates for a second time this year. The minutes stated: “Regarding the monetary policy outlook after this meeting, most participants judged that another increase in the target range for the federal funds rate may be appropriate by the end of the year.”
“However, participants emphasized that they would approach each meeting with an open mind, and that decisions at future meetings would depend on incoming information and its implications for the economic outlook and the balance of risks.” Discussions at the September meeting showed that officials saw a risk that inflation could remain stubbornly persistent, while the labor market was “close to full employment” and overall economic growth had picked up. The minutes stated: “Many participants emphasized that, from a risk-management perspective, a path of increasing the target range for the federal funds rate would be prudent, providing insurance against the risk that inflation could remain above target because demand is stronger than expected or further adverse supply shocks occur.”
