WASHINGTON–A majority of members of the Federal Reserve indicated during the Fed’s September meeting they believe interest rates would need to remain “restrictive” until they are convinced inflation is headed firmly toward the central bank’s 2% annual target, newly released meeting minutes show.
While there were differences among Fed members over a whether more interest rate hikes would be needed, a majority did favor one more increase, the minutes show.
Some Believe ‘Shift’ Needed
That majority believes one more increase in the target federal funds rate at a future meeting is likely needed, while some said no further increases “would be warranted,” the minutes from the Sept. 19-20 meeting of the Federal Open Market Committee reveal.
“…Several. participants commented that, with the policy rate at or near its peak, the focus of monetary policy decisions and communications should shift from how high to raise the policy rate to how long to hold the policy rate at restrictive levels,” the minutes add.
Analysts Are Divided
Economists and analysts have been somewhat divided over what direction the Fed will take, but recent strong job numbers may push the Fed to push rates up slightly higher. In addition, the Producer Price Index for September also came in higher than some had expected. Both factors show inflation remains difficult to tame.
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