The Federal Reserve is still primarily worried about inflation even though economic growth is moderating in the US, records of last month's meeting of key policymakers show - suggesting that any reduction in its short-term rates may yet be some months off.
"Members agreed that the statement should continue to convey that inflation risks remained of greatest concern and that additional policy firming was possible," the Federal Open Market Committee (FOMC) said yesterday, in minutes of its 12 December session.
"Although readings on core inflation had improved modestly since the spring, nearly all participants viewed core inflation as uncomfortably high and stressed the importance of further moderation."
Stocks on Wall Street retreated after the minutes were released, but bond prices rose fractionally, suggesting the market still expects the Fed's next rate move to be downwards. The FOMC left its benchmark federal funds rate unchanged last month at 5.25 per cent, where it has stood since the summer.
Manufacturing managed a surprise recovery last month, reversing a decline in November. But US car makers are not joining in the recovery. Figures yesterday showed Ford's domestic sales dropped 13 per cent in December, largely because of a dip in pick-up truck sales. But Toyota sales jumped 12 per cent.Reuse content