Federal Reserve officials said at their meeting last month that the pace of future interest rate hikes will depend on the data they receive, with some arguing that rates would need to be “tight enough” for “some time” to control inflation.
According to the minutes of the July 26-27 meeting, the authorities believed that inflation could take longer than expected to dissipate, and that a slowdown in aggregate demand caused by the central bank “would play an important role in lowering pressures”. inflationists”.
The minutes, released Wednesday, did not indicate a clear trend among Fed officials in favor of a smaller rate hike — by half a percentage point — or a third consecutive 75 basis point hike at the next meeting on 20 and September 21, but an insistence that it depends on the performance of inflation and the economy.
The Fed has raised its overnight benchmark interest rate by 225 points this year, to a target range of 2.25% to 2.50%, as part of an effort to rein in inflation, which is at a four-decade high. by the Fed’s preferred measure, by more than three times the 2% target.
The central bank is widely expected to raise rates next month by 50 to 75 basis points.
For the Fed to slow the pace of rate hikes, inflation reports due out before the next meeting should confirm that price increases have peaked and are now on the decline.