Federal Reserve minutes: Too-high inflation, still a threat, could require more rate hikes

Most Federal Reserve officials last month still regarded high inflation as an ongoing threat that could require further interest rate increases, according to the minutes of their July 25-26 meeting

Federal Reserve Minutes (Copyright 2023 The Associated Press. All rights reserved.)

Most Federal Reserve officials last month still regarded high inflation as an ongoing threat that could require further interest rate increases, according to the minutes of their July 25-26 meeting released Wednesday.

At the same time, the officials saw “a number of tentative signs that inflation pressures could be abating." It was a mixed view that echoed Chair Jerome Powell's noncommittal stance about future rate hikes at a news conference after the meeting.

According to the minutes, the Fed's policymakers also felt that despite signs of progress on inflation, it remained well above their 2% target. They “would need to see more data ... to be confident that inflation pressures were abating” and on track to return to their target.

At the meeting, the Fed decided to raise its benchmark rate for the 11th time in 17 months in its ongoing drive to curb inflation. But in a statement after the meeting, it provided little guidance about when — or whether — it might raise rates again.

Most investors and economists have said they believe July's rate hike will be the last. Earlier this week, economists at Goldman Sachs projected that the Fed will actually start to cut rates by the middle of next year.