Fed's Minutes Show Inflation Concerns After Katrina

igher fuel prices aggravated by Hurricane Katrina could filter into the cost of consumer goods — at least in the short term — potentially curbing spending and economic growth, according to the minutes of the Federal Reserve’s Open Market Committee meeting Sept. 20, which were released Tuesday.

“The surge in energy prices was boosting overall inflation, and some of that increase would probably pass through for a time into core prices,” the Fed said.

In the forecast prepared for the meeting, FOMC lowered its projection for economic growth over the remainder of 2005 in light of the economic dislocation associated with Hurricane Katrina. At the same time, however, the Fed increased the growth rate forecast for 2006 to reflect the boost to economic activity from the rebuilding effort.

The meeting was the sixth of eight FOMC meetings scheduled for this year. The next meeting is set for Nov. 1.

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