Fed Minutes Reveal Continuing Inflation Concerns

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ederal Reserve commissioners expressed continuing uncertainty regarding future interest rate hikes after deciding during the Federal Open Market Committee’s Sep. 20 meeting to hold rates at 5.25%, according to minutes of the meeting that were released Wednesday.

The decision to continue the pause in rate hikes was not as close a call as the committee’s decision at the previous meeting to maintain a 5.25% target rate, Bloomberg reported.

While the minutes show that committee members’ inflation outlook had improved “modestly,” they also note that Fed officials “continued to see a substantial risk that inflation would not decline as anticipated by the committee.”

As he did at the August 8 meeting, Richmond Fed President Jeffrey Lacker continued to oppose the pause in rate hikes and called for another increase, according to the minutes.

Prior to an Aug. 4 decision to hold rates steady, the Fed had raised rates by a quarter-point for 17 straight meetings dating back to June 2004.

The Sept. 20 meeting was the sixth of eight FOMC meetings scheduled for this year.