As recently as three weeks ago, most Federal Reserve officials said they still viewed high inflation as an ongoing threat that could merit additional interest rate increases.
That’s according to the U.S. central bank’s July 25-26 meeting minutes, which were 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, “[M]ost participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy.”
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.
Even so, some analysts on Wall Street are forecasting the Fed might pause on further rate hikes this year and start cutting rates in 2024, pointing to the ongoing trend of lower inflation throughout the year. But the Fed has long signaled that it wants inflation to return to the 2% range before easing up on its campaign of rate increases.
“The primary takeaway from the recently released minutes from the July FOMC meeting was that central bankers did not rule out additional rate hikes if inflationary pressures rise,” said Sam Millette, fixed income strategist for Commonwealth Financial Network, in an email.
Loading…
Source: www.cbsnews.com
ENB
Sandstone Group
