Fed Officials Still Worried About US Inflation: Is A New Rate Hike Coming?

The Federal Reserve officials they were shown divided about the need to new rate hikes of interest in the Central Bank meeting of the July 25 and 26according to minutes of the session published this Wednesday.

At the meeting, “some participants cited the risks to the economy of push rates too faralthough most of monetary policy makers continued to give priority to the fight against inflation.

“Participants kept firm in their commitment to reduce inflation until the 2% target“, pointed out the minutes of a meeting in which those responsible for Federal Open Market Committee of the fed unanimously agreed to raise rates at the level of 5.25%-5.50%.

“Most of the participants continued to watch significant upside risks to inflationwhich might require a further tightening of monetary policy”read the published minutes.

The nuances of the debate: some bet for greater caution

However, cautious voices about the effects of a monetary tightening continued to appear to play a leading role in the debate last monthan indication that the dispersion of opinions in the fed expanded as evidence is weighed that inflation is subsiding and the potential damage to employment and economic growth if rates are raised more than necessary is judged.

“Some” participantsFor example, they advocated maintain the cost of credit no change in July.

The group also “discussed various risk management considerations that could influence future monetary decisions,” according to the minutes.

Although the majority maintained inflation As the overriding risk“some participants commented that, although the economic activity had been resistant and the working market had stayed strong there were still downside risks to economic activity and upside risks for the unemployment rate“.