Federal Reserve policymakers voiced concern about the rate of inflation at their most recent meeting and cautioned that additional rate hikes may be required in the future unless circumstances change.
Markets largely anticipate that the quarter percentage point rate increase that came about as a result of that discussion during the two-day July meeting will be the last one of this cycle.
“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,” the meeting’s summary read.
With the most recent hike, the federal funds rate, the Fed’s primary borrowing rate, reached its highest level in more than 22 years, which is a target range of between 5.25% and 5%.
Although some members have expressed since the meeting their belief that additional rate increases may not be necessary, the minutes advised caution. Officials recognized pressure from a number of factors and emphasized that decisions in the future will be based on new information.
“In discussing the policy outlook, participants continued to judge that it was critical that the stance of monetary policy be sufficiently restrictive to return inflation to the Committee’s 2 percent objective over time,” the paper stated.
However, conversations revealed that the majority of members are concerned that the struggle against inflation is far from done and may call for further tightening measures from the Federal Open Market Committee, which sets interest rates.